As predicted, the latest spate of cold weather is proving to be short-lived, resulting in mixed price movement Thursday that was slightly weighted to the downside. Many points were less than a nickel up or down from flat.
A small majority of points fell between 2-3 cents and a little more than 20 cents. The rest of the market ranged from flat to up about 15 cents. Northeast citygates had stood out Wednesday with significantly higher increases than the rest of the market. The Northeast was conspicuous again Thursday, but this time for recording the largest losses.
Gulf Coast producers got some relief when Columbia Gulf was able to start moving about 1.2 Bcf/d again Wednesday evening and resumed accepting production-area receipts (see related story). The pipeline restored Line 300 to service at the Hartsville (TN) Compressor Station, which had been totally knocked out Tuesday night by an explosion caused by a tornado strike. It expected to reactivate Line 200 Thursday evening and Line 100 sometime Friday. When flows resume on all three lines, the Hartsville capacity will be about 1.5 Bcf/d, Columbia Gulf said.
Much of the U.S. and Canada will be in modest warm-up mode Friday, although pockets of frigidity will remain. For instance, Minneapolis was predicted to see Thursday’s low of about 17 degrees sink to zero Friday, with accompanying snow. The South is returning to spring-like highs in the 60s and 70s, while the Northeast will see an almost imperceptible rise in temperatures. The interior West, which has endured more frequent and more extended cold snaps in recent weeks than the East, is about to start “getting a break from the deep freeze,” a producer said.
However, another brief period of cold is just around the corner. What The Weather Channel called a “blustery arctic cold front” will sweep through the northern Plains and Midwest this weekend, leaving temperatures as much as 25 degrees below average in its wake. The Northeast and upper half of the West can expect stormy weekends with significant amounts of snow. The South will remain fairly moderate, and California and the desert Southwest will be seeing above-average temperatures.
The Energy Information Administration’s report of a 200 Bcf storage withdrawal during the week ending Feb. 1 exceeded consensus expectations centered around the mid to high 180s Bcf. Nymex traders responded with subdued bullishness, sending March futures to a daily gain of 10.8 cents.
Texas Eastern and Algonquin, anticipating the return of cold weather in the Northeast this weekend, said they will start restricting nominations involving imbalances Sunday (see Transportation Notes). However, as of Thursday MRT’s System Protection Warning was the only cold-related pipe constraint in effect.
Tight supply issues were disappearing in the West. El Paso, which had warned Wednesday of a potential Strained Operating Condition due to low linepack, canceled the warning Thursday.
A Calgary-based producer thought it was about time for harsh winter weather to dissipate in the West. The Rockies have struggled for a while with low field receipts from freeze-offs and pipeline constraints, he said. Calgary will get a couple of days of cold again this weekend but will be “much better off next week,” he added.
The producer noted that alternating periods of moderation and severe cold have been a climate fixture for much of North America in the last month or two. There will be a few days of relative warmth followed by a few days of major cold, he said, and that pattern has been repeating with varying degrees of regularity for some time now. “This variability usually occurs as we’re exiting winter,” he said, but it’s happening earlier this time.
The producer said he expects to see most prices a little bit firmer Friday but added that the briefness of the next cold wave may allow some to “coast” on storage withdrawals, which could create softness here and there.
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