Mixed price movement continued in the cash market Thursday, but unlike the day before when gains exceeded losses, this time declines were in the majority. Heating load is dwindling in northern market areas and so far there’s precious little cooling load developing across the southern U.S. to replace it. Atlanta temperatures were due to peak around 70 Friday.
After recording Wednesday’s largest gains, the Rockies were way out in front of the general softness Thursday with plunges of 70-95 cents or so. A cold snap in the region proved to be fleeting, as Denver’s high of 71 degrees Wednesday was replaced by one around 57 Thursday but was forecast to return to the vicinity of 70 again Friday. All Rockies averages sank to less than $5.
Outside the Rockies, near-flat quotes were common again as prices ranged from down a little more than 35 cents to up about 15 cents. Along with Dominion in Appalachia, Northeast citygates took the biggest price hits as the region, while still fairly chilly Thursday, is on the verge of a warm-up from Friday through Sunday, according to The Weather Channel.
The unseasonable cold of early April had been keeping all points trading well above first-of-month indexes, but on Thursday quite a few points, primarily in the Gulf Coast and Midwest, were at deficits to index. Despite their big losses, the Rockies still maintained triple-digit premiums to index.
As expected, the Energy Information Administration did estimate a sizeable withdrawal from storage for the week ending April 13, the second week of what is recognized as the injection season. But the 46 Bcf pull, though on the high side of prior expectations and nominally bullish in comparison with the five-year average’s 25 Bcf injection for the week, had already been thoroughly factored into market psychology because of the unseasonably cold weather in several regions last week (see futures story). Nymex traders essentially treated the report as neutral in pushing May futures a mere half-cent lower.
A Gulf Coast producer thinks price softness likely will continue and become more widespread Friday when the drop of industrial load over a weekend becomes a factor. Weather-based demand is minimal with it gradually getting warmer in northern market areas, he said. There might be a little air conditioning load developing in the western end of the South (Houston’s forecast calls for highs in the low 80s through at least Monday), but so far it hasn’t stimulated any appreciable extra gas purchases by power generators, he said.
Everything’s pretty smooth with transportation, the producer continued, and it looks like the market is settling into a “quiet” period again.
Natural gas is “out of the money” in the Pacific Northwest right now, a utility buyer commented. Hydroelectric supplies currently are abundant, she said, and “I don’t think anyone in the region” is running gas-fired peaking plants.
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