The spot market closed out the trading week Friday with increases across the board that were largely attributed to the screen’s prior-day spike of 37.5 cents. Activity was generally quiet as traders geared up for the approaching April bidweek, a source said.
The futures support for cash prices was augmented by the fact that despite slight warming trends predicted in most areas over the weekend, there would still be plenty of freezing and near-freezing temperatures to go around, so heating load wasn’t slacking off by much.
Gains were fairly evenly distributed across all market areas in ranging from as little as a nickel to around 40 cents. Only Texas Eastern-South Texas failed to achieve a double-digit increase.
A majority of trading points ended the week at dime-plus premiums to their first-of-month indexes. The ones that were flat to index or running a deficit were concentrated in the West (excluding Western Canada) and Midcontinent/Midwest.
As The Weather Channel (TWC) observed, “In what is traditionally the busiest spring break period, the weather is chilling the party in the South.” Date-specific record lows were set Friday morning in Texas and Oklahoma, it said, and although the western end of the South would be warming up considerably over the weekend, the region’s eastern sections could expect wintry conditions to stick around for a while longer. Several cities in Florida, where it had been warm enough to prompt Florida Gas Transmission to declare an Overage Alert Day earlier in the week, could experience record lows for the date Saturday morning, TWC said.
While much of the Midwest could expect some break in the siege of cold by Sunday, residents of the Northeast weren’t so fortunate. The Northeast will have to wait until some time this week, if then, to get a warm-up of any significance. Meanwhile, although snow and cold were expected to persist through the weekend in the upper reaches of the West, much of the region will be entering this week amid mild conditions appropriate for the new spring season.
After getting restarted Thursday for the first time since a shutdown caused by Hurricane Rita last September, the Sea Robin Processing Plant was reported out of service again Friday (see Transportation Notes).
It’s been quite a week as far as the weather goes, commented a Gulf Coast producer. The Dallas-Fort Worth metro area had seen a few snow flurries Thursday night and there was frost on the ground Friday morning, she said, but by Sunday highs should be getting to around 70 degrees or so. She thought most of Friday’s cash firmness was based on Thursday’s screen spike, which, of course, was largely a product of strength in the oil markets. However, having been able to place all her weekend supplies with ease, she conceded that heating load was still substantive.
The producer said her company had wrapped up “about 99%” of its April baseload sales Thursday, and had just a few dribs and drabs of gas left for this week. “We got quite a few summer term deals done [last] week,” she went on, so that put a serious dent in the amount of production left for discretionary sales. She reported hearing these April basis numbers through Thursday: Columbia Gulf-mainline was minus 3 cents at first but tightened to minus 1 cent later; TGT Zone 1 was around minus 20 cents; and the Tennessee 800 Leg was quoted at minus 15-17 cents.
An industrial end-user with plants in various sections of the U.S. said the only basis talk he was hearing was Southern Natural Gas at plus 0.5 cent. The Chicago area high was around 40 degrees Friday afternoon, which was “not too bad,” he said, but the city could expect “a little bit of warm-up” over the weekend.
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