The Northeast is emerging more slowly than expected from weekend winter storms that snarled air traffic in that region and others. Nevertheless, Northeast citygate prices saw double-digit declines Monday amid overall softness based on forecasts of mild temperatures in nearly all areas this week. Several scattered points managed to buck the trend with numbers that were flat to more than half a dollar higher.
An oversupplied and undertransported West was home to all of Monday’s dollar-plus plunges, but it was also where several of the small gains were recorded. Overall losses ranged from 2-3 cents to about $1.45.
PG&E citygates rose about 15 cents after the utility lifted a weekend high-inventory OFO, but the Southern California border was only barely lower after SoCalGas kept its own OFO in effect through at least Tuesday (see Transportation Notes).
With Rockies takeaway volumes severely crimped by large cuts in El Paso’s North Mainline capacity this week (see Daily GPI, Feb. 22) and very light heating demand in general outside northern mountainous areas, some Rockies points were seeing quotes drop as low as $2.80. The spread between Sumas and Northwest-domestic widened to more than $2.40 (Sumas on top).
As the capacity-reducing maintenance began Saturday, El Paso warned in a bulletin board posting that system was experiencing high linepack and the Washington Ranch Storage facility was at maximum injection capability. Due to the maintenance, El Paso said it is not accepting any receipt volumes above scheduled volumes systemwide and that it would declare a Strained Operating Condition if necessary.
The Northeast had been expected to begin a modest warming trend early this week, but instead lows will be sinking into the teens Tuesday in New York City and Boston and snow showers remain in the forecast for northerly parts of the region. Little change is expected in the Midwest, where a cold front had stalled Monday. Meanwhile, it’s starting to feel spring-like again in the South and the southern half of the West.
It was an impressive sight Monday on the National Weather Service’s (NWS) website where the federal agency’s six- to 10-day forecast is posted (https://www.cpc.ncep.noaa.gov/products/predictions/610day/). For the March 24-28 period, NWS expects a sea of red (shifting to shades of orange in southern Texas and peninsular Florida) throughout the entire Lower 48 states. Red on the NWS map denotes the largest temperature deviations above normal, while orange indicates lesser differences from normal.
Mild weather forecasts should keep prices moving lower at least through the rest of the week, a Midcontinent producer said. He also noted that screen support for the cash market was not forthcoming, with April futures down another 7.7 cents to $6.847. Not only that, but natural gas can’t count on any help in a rebound attempt from the oil market, with crude futures sliding to their first sub-$57/bbl close in seven weeks, he said. Oil traders are getting pretty worried about the prospects for a weakening global eocnomy, centered especially in China, during the coming months, he added.
The producer reported completing an early April MichCon baseload deal Monday at the fixed-price equivalent of $7.10. He bought the gas Friday at a “paper” Nymex value of $6.938, he said, and then sold it Monday at basis of plus 16.2 cents.
$7.10 is 57 cents less than NGI’s MichCon index for March.
Citing temperatures 23% below normal in its operating area last month, Dominion reported withdrawing 78 billion Bcf from storage to meet customer demands, which it said is an all-time record for February. “That total is equivalent to the natural gas requirements of about 540,000 average-size homes for one year,” Dominion said in a bulletin board posting. “The earlier highest February withdrawal over the last decade was 61.4 Bcf in 2003. Despite adverse weather conditions, dedicated employees and well-functioning facilities ensured the company’s ability to deliver gas supplies to Dominion Transmission’s customers.”
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