April began Friday with fairly heavy snowfalls in upper New England, the eastern Midwest and even parts of the Pacific Northwest, according to The Weather Channel (TWC). But with warming trends due over the weekend, the belief that wintry weather was on its last legs except for remaining subfreezing patches in Canada resulted in softness being slightly dominant in a mixed cash market that was mostly flat or close to it.
The typical weekend drop of industrial demand made a small contribution to the overall declines, while the prior-day May futures increase of 3.4 cents likely helped keep some points on the rise.
Flat numbers were very common in the Gulf Coast, and none of the gains got any larger than about a nickel. Otherwise, Northeast citygates led losses ranging from 2-3 cents to nearly a quarter, with Transco Zone 6-New York taking the biggest hit.
The screen will add to generally cool to warm weather in providing negative guidance for Monday’s cash prices after May futures fell 2.7 cents (see related story).
Evidently, Northeast traders were looking beyond Friday’s cold and occasionally snowy conditions to more moderate weather in the offing as they created the day’s softest market in their region. Forecast highs rising to around 80 or higher in the Gulf Coast states from Texas to Florida likely helped keep most of that market from joining the general declines. The Midwest would still be a bit on the chilly side, but at least residents could look forward to some respite from the recent cold.
A surfeit of supply was a significant reason for western softness at most locations. PG&E extended a high-inventory OFO and Westcoast added one of its own. CIG reminded shippers about details of a Strained Operational Condition initiated last Monday due to warmer forecasts for much of the Rockies (Denver was predicted to reach the mid 70s Saturday), and El Paso said it was experiencing moderately high linepack.
Largely due to Westcoast’s OFO, Westcoast Station 2 was the only Western Canada point to fall while the two Alberta trading points rose about a nickel.
The two major Appalachian pipes went in opposite directions, with the differential narrowing from 15 cents Thursday to about 8 cents. IntercontinentalExchange (ICE) said Columbia Gas (TCO) numbers on its platform were up a couple of pennies while the volume rose from 568,200 MMBtu Thursday to 720,700 MMBtu Friday. And although Dominion dropped a little more than a nickel, ICE activity soared from 519,100 MMBtu to 949,500 MMBtu.
Referring to an AccuWeather.com forecast of an “active” 2011 hurricane season (see Daily GPI, April 1), Citi Futures Perspective analyst Tim Evans downplayed the impact that even an “active” season can have on the market these days, noting:
With most of Friday’s coldest weather in the Midwest to the east of him, a regional utility buyer said his area was “creeping higher” in temperatures and should have a nice weekend. It will get a little colder again Monday, he said, but not by much. He perceived a quiet market period setting in for a while as winter-like conditions finally leave the Midwest.
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