Multi-dollar drops at Northeast citygates were conspicuous amid continuing declines at most points Friday. Heating load was dropping due to moderating weather trends in several regions; storage use continued to supplant spot gas buying and the weekend loss of industrial load was a factor.

Flat to a little more than 12 cents higher prices were scattered among several regions. Most of the market saw declines ranging from 2-3 cents to $5.50 or so. Outside the Northeast losses were capped at a little more than 60 cents on Southern Natural Gas, which was ending an OFO Saturday that had been implemented two days earlier (see Transportation Notes).

The Northeast could be considered a case of “the bigger they come, the harder they fall.” Friday’s plunges were much greater than the sum of the spikes on Wednesday and Thursday that had been at odds with overall price softness. For example, the Algonquin citygate fell just shy of $4 Tuesday to average $13.61 prior to adding $2.10 in the next two days. The point saw Friday’s biggest drop of about $5.55 to a average $10.17.

Although much of the Northeast and Midwest was still frigid with few locations due to get above freezing Saturday, that represented a modest warm-up from colder temperatures earlier in the week. The South was expected to see rising highs during the weekend, although Saturday forecasts still had some sections with temperatures bottoming out near freezing. Most of the West outside the Rockies was merely cool to chilly, but the Rockies would continue to record sub-freezing lows at least through Saturday.

Pipelines continued to shed OFO-like constraints that had been issued because of the severe winter weather that had been around since the holiday weekend (see Transportation Notes). In an ironic turn of events, MRT, which had just lifted a cold weather-related System Protection Warning Friday, said it was initiating a new SPW for Sunday and Monday due to “warm weather” forecasts.

“It’s all weather-related,” a Gulf Coast producer said in referring to the huge drops in the Northeast. He saw potential for a midweek rally in cash when some cold weather returns this week but expected it to be modest at most. Utilities are just too intent on making sure they meet storage withdrawal schedules to allow any major rebound, he said.

The producer said his company started February baseload trading Thursday. In deals done Friday, he quoted basis for Columbia Gulf mainline at minus 3 cents. Transco Station 65 basis was much stronger initially Friday at plus 29 cents and then strengthened even more to plus 32 cents in the afternoon, he said. He also reported making deals into ANR Southeast at index plus 0.5 cent and into Columbia Gas in Appalachia at index plus 0.25 cent.

A Midcontinent producer said he was finding little capacity available on Enogex to the interstate pipes, which made marketing his production more difficult. None of the Oklahoma intrastates were buying spot gas Friday, he said, and demand was light on Midcontinent interstates. However, cash prices were rising near the end of trading when buyers found themselves in undesirably short positions, he said.

The producer said suppliers are trying to sell early for February as they realize it’s the highest month of the near-term Nymex futures strip. He was looking for some downward pressure on prices as bidweek proceeded because of the rush to sell but said February futures’ repeat of Thursday’s 18.1-cent gain Friday cast some doubt on that expectation.

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