Colder weekend trends in sections of the South and Midwest failed to inspire enough heating load to counter the bearish influences of generally moderate weather as winter enters its final week, the prior-decline of 11.9 cents by April futures and the dropoff of industrial demand during a weekend. As a result, prices fell at all but one point Friday.
Flat quotes for Transco Zone 5 in the Mid-Atlantic constituted the sole exception to declines ranging from a little less than a nickel to slightly more than a dime.
Monday’s cash prices will again have no screen support as prompt-month futures weakened for a second straight day, dropping 4 cents to $4.400 (see related story).
Some Southern locations such as Birmingham, AL, were due to see high temperatures drop as much as 10 degrees from Friday to Saturday, although much of the region could expect smaller declines. The Midcontinent and Midwest were approximately evenly balanced between forecasts for warmer and colder weather.
The Northeast would tend to see little change in conditions; for example, the high in Boston was expected to go up 2 degrees to 44 Saturday, while New York City’s was predicted to fall by 1 degree to 48. The general trend in the West was for flat to modestly higher temperatures.
A ONEOK transmission line ruptured in an isolated area near Chandler, OK, Thursday afternoon, but no injuries were reported. The fire was extinguished within three hours of the blast, and gas flows through the rupture vicinity, where capacity was 266 MMcf/d, were shut off, ONEOK spokeswoman Megan Washbourne said. The pipeline, working with the Oklahoma Natural Gas LDC, found that only nine rural residential customers had lost service, she added. Crews began repairs Friday afternoon that would continue through the weekend.
Count Barclays Capital analysts as among those who believe the market might experience net storage injections before April. “Withdrawals might not have much longer to live as the spring could bring an injection as early as in the third week of March,” they said in a Friday advisory note.
A utility buyer said temperatures were falling enough in his company’s service area that he picked up a sizeable amount of spot gas to handle weekend heating load, paying in the low $4.30s into TGT SL and Trunkline Zone 1A. A gradual warm-up is due in the coming week, he said, so he may not need to buy any more spot supplies for a while.
The buyer also reported entering into nearly 60 MMcf/d of April-October term contracts, using both index and basis pricing.
A western trader said much of the West Coast had a little cold weather earlier last week, but it was abating going into the weekend. The overall region is not exactly in a low-demand period, she said, but load has gotten “lower” than before. She attributed most of Friday’s cash softness to the previous day’s futures drop.
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