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Milder Forecasts Cause All Points to Drop
Although lows around freezing or below would persist into at least Saturday in the Northeast, Midwest, much of the interior West and the eastern end of the South, prices fell by double-digit amounts at all points Friday. A gradual warming trend was under way in many areas, especially in the South where near-springlike temperatures could be expected by early this week.
The loss of industrial load that accompanies a weekend was another factor in Friday’s softness. Thursday’s 2.9-cent gain by March futures provided scant support for cash numbers, and a 33.4-cent screen plunge Friday will make any attempt at a cash rally Monday considerably more difficult.
Declines ranged from about a dime to half a dollar or so. Northeast citygates turned in a repeat of Thursday’s performance in leading the market’s descent.
As a sign of the easing demand picture, MRT and ANR ended restrictions related to the latest cold snap (see Transportation Notes). However, Algonquin said Friday afternoon it was experiencing high due-pipe imbalances and that no due-shipper paybacks or creation of negative imbalances was allowed until further notice.
Southern temperatures will be substantially above average through Tuesday ahead of a new cold front Wednesday, The Weather Channel (TWC) said. The Northeast also could expect above-average readings through the weekend but would remain fairly cold. A weak front was due in the Midwest but weekend highs would range from the teens in North Dakota and northwest Minnesota to the 40s and low 50s across Kansas, Missouri and Kentucky, TWC said.
Freezing temperatures remained in the forecast for the Rockies and parts of the Pacific Northwest, but the West Coast and desert Southwest were expected to be merely chilly.
Less than a week after a Jan. 26-27 weekend loss of an estimated 100 MMcf/d of Sable Offshore Energy Project (SOEP) production that was resolved last Monday (see Daily GPI, Jan. 29), Maritimes & Northeast (M&N) reported another shortfall of SOEP receipts (see Transportation Notes) that began Thursday and was expected to last through at least Saturday. A spokesman for SOEP operator ExxonMobil said a mechanical problem had arisen. Work was under way to restore production to normal levels, he said, but it was unknown how long that would take. He declined to disclose how much production was off-line, saying the amount was “changeable.”
The reduction of M&N throughput caused its delivery terminus at Dracut to register a relatively modest (for the Northeast) drop of only about 25 cents.
Kern River said its linepack had returned to normal in all four segments Friday. However, El Paso said its probability of declaring a Strained Operating Condition or Critical Operating Condition had been set to high due to low linepack.
The leveling of the basis playing field by the Rockies Express Pipeline continues to pay off for Rockies producers. As of late last week Rockies prices were at approximate parity with those in the Midcontinent, while some Rockies averages actually came in higher.
There was still plenty of weather-driven demand in the Rockies, a marketer in the region said, so it’s not surprising that even with Friday’s large drops, spot gas was trading above first-of-month indexes. Friday was pretty quiet, he added. He declined to hazard a guess on whether the cash market can manage a rally in the coming week, saying there’s “no telling” what might happen.
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