Weakening weather fundamentals, the industrial load drop typical of a weekend and a mildly bearish storage report the day before combined to keep prices on the slide Friday at all points. Declines ranged from about a nickel to just over 20 cents.
Nearly four weeks after the season officially began, spring was finally making itself manifest in all regions late last week. Well, not quite. Overnight lows were still dipping into the 30s in parts of the Rockies and into the 20s in the Calgary area. “We still have snow on the ground here” and it’s chilly during the day, said a Calgary-based producer, but he added that eastern Canada was warming up along with the Northeast.
The producer noted that Nymex winter basis weakened Friday. He also said ANR’s Joliet Hub near Chicago was restricting secondary firm service, which hampered some deliveries into Michigan. Otherwise the market was pretty quiet, with a lot of people apparently going home early even in the absence of a holiday weekend.
Although Texas was starting to experience highs in the 80s following a cool beginning of the week, the state still had no appreciable air conditioning load, said a marketer, who added that his company hadn’t made any sales to utilities in two weeks. “Somebody bought 140 [MMcf/d] baseload for April from us but is only burning about 80 [MMcf/d] right now,” the marketer continued. He assumed they were either taking the balance into storage or reselling it. Storage is filling up quickly in Texas, he said.
And in another potentially bearish development, both the Comanche Peak and South Texas Project nuclear plants still have one unit down each but they’re expected to return to service by May 1, which could cut significantly into Texas power generation demand for gas next month, he said.
The marketer said he’d read that PIRA Energy in New York is guessing zero (no net injection or withdrawal) for the next storage report, “but I expect another injection.”
Citigroup’s Kyle Cooper agreed, saying his initial estimation for the report looks for a build “just above 20 Bcf.”
“We’re sitting here in the upper 80s,” a utility buyer in the central Plains commented. He reported trading Northern Natural-demarc early in the mid $5.10s and then saw prices going a little higher in late deals, so he estimated his quotes would be about a nickel below the demarc WACOG. He could see no reason for the late upticks, saying cash prices certainly didn’t get any support from a falling screen.
A marketer in the Upper Midwest said Michigan temperatures would “be pushing 80” over the weekend. He confessed to having “spring fever” Friday with such fine local weather after a long winter. It’s too early for cooling demand in the region, though, he said; Midwesterners would rather just open a window right now and wait for it to get hotter before they turn on their air conditioners.
A Northeast marketer also may have had the fever. “It’s looking a lot more like spring around here than it was early in the week, and it sure is about time,” she said. She thought the softer weekend cash market tended to help drag futures lower.
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