The cash market clung to flat to slightly higher numbers at a few points Tuesday, but the predominant direction of price movement was downward. Although the weather picture continued to look fairly wintry through Wednesday and beyond for the Northeast, Midwest, Plains and to a lesser degree the upper West, storage use appeared to be offsetting demand for new production to a large degree.
Losses extended from a couple of pennies to nearly 30 cents, and most were in double digits. The occasional flat to a little more than a nickel higher points were all in the East.
A bit of air conditioning load is starting to creep into the market. Florida Gas Transmission cited warm temperatures in central Florida in issuing an Overage Alert Day notice (see Transportation Notes).
But across the northern half of the U.S. the arrival of spring is running late. More snowfall is predicted for Wednesday in parts of the Northeast, Midwest and Upper/Central Plains as far south as the Oklahoma and Texas Panhandles. However, icy precipitation is retreating to some degree in much of the West and regional temperatures are getting closer to slightly below early spring averages.
Outside of Florida’s warmth, much of the South is experiencing merely cool conditions during the day and then falling to near freezing at night. For example, Atlanta had an overnight low of 36 degrees forecast while Birmingham, AL was expected to see a low of 33.
The market is definitely getting a little slower with increasing storage use and warming trends coming up in a few days, said a marketer who trades the Midwest. There was a of snow piled up in the Plains and Midwest Tuesday, he said. They should keep getting snow through about Friday, but the regions are predicted to be much more springlike by early next week.
The marketer said he complained to Northern Natural Gas about its curtailment of IDD (interruptible deferred delivery), the pipeline’s nonfirm storage service. Essentially “they told me to get over it,” he said.
The marketer said he’s thinking April basis at the Chicago citygate will be around minus 35 cents, but added that he hasn’t talked with enough traders to really get a good feel for it yet. It’s still too early for many to be interested in getting into bidweek business yet, he said.
A Calgary-based producer said the big issues for the Western Canada/Pacific Northwest market right now are Westcoast’s White Rock Compressor Station project and ongoing scheduled maintenance on Alliance’s Blueberry Compressor Station. Blueberry is cutting British Columbia gas moving eastward and White Rock is restricting Westcoast deliveries to Sumas, he said. The White Rock work wasn’t supposed to coincide with Alliance project, but that’s how it worked out, he added. Later this week part of the White Rock restriction on Westcoast southbound flows will ease, he said.
Malin’s being stronger relative to NIT (NOVA Inventory Transfer) Tuesday probably had something to do with PG&E’s customer-specific OFO called for Wednesday (see Transportation Notes), the producer continued. Temperatures were just below freezing Tuesday afternoon in the Calgary area, he said, but some weather more closely resembling spring is due later this week.
The National Weather Service’s forecast for the March 27-31 workweek calls for below normal temperatures everywhere except in Maine east of a line running northward along the Mississippi-Alabama border before bulging out to include the eastern sections of Missouri and Iowa, then coming back northeastward through southern Wisconsin and including all of Michigan except the Upper Peninsula. Above normal readings are predicted throughout the Southwest as far east as central Texas, Oklahoma and Kansas, and in most of the Rockies region and California; northeast Wyoming, all of Montana, upper Idaho, western Oregon and the coastal strip of California are excluded from the above normal section and are expected to see normal conditions.
Can this be spring? wondered the Weather 2000 consulting firm in a Tuesday advisory. On the first full day of astronomical spring, New Yorkers awoke to windchills of 14 degrees while central Nebraska was digging out from 2 feet of new snow, but that was surprising only to those examining a calendar, it said. “But with the AO teleconnection currently more negative than it was even in December 2005, and the January thaw only leading to more cold [and] snow for February-March, this is all meteorologically logical. The national weather continues to rival, if not surpass, the cold temperatures and patterns witnessed March 15-31 during the years of 2005, 2004, 1992, 1975 and 1967. Eastern states should not witness an above normal temperature week, at least through the first week of April.” Even during its most stubborn years, winter’s harshness usually loses its grip by mid-April, “so remaining polar cold will be measured in weeks, not months, at this point.”
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