Gains handily outweighed losses in mixed price movement Monday while an ice storm continued to rage through the central U.S. Transco’s Zone 6-New York City pool and Iroquois Zone 2 spiked by about $1.50 to as high as $14.00 and $13.75, respectively, as very cold and weather was expected to remain in place Tuesday across the northern half of the U.S. and Canada.
Most points were flat to nearly $1.55 higher. Losses ranged from 2-3 cents to about a quarter. Despite the harsh conditions in much of the region, all Midwest citygates saw small declines.
Besides the heating demand in northern market areas, the return of industrial load from its typical weekend hiatus helped boost prices. Tuesday’s cash market will continue to have negative prior-day screen guidance after the January gas contract fell another 12.3 cents Monday.
Icy conditions will continue to besiege areas of the Midwest and Plains Tuesday, according to The Weather Channel (TWC), and lows around freezing in the Northeast along with snowfalls in northern New York and New England are still anticipated. However, weather more closely resembling early autumn than mid-December has returned to most of the South, where highs in the 70s and even low 80s are due Tuesday.
Snow will extend from the Rockies even into parts of the desert Southwest, TWC said. And the Golden State isn’t escaping the chill; frost advisories were posted for Monday night in California’s San Joaquin Valley.
Rockies producers will have to wait a little longer to begin receiving the price boost that the start of interim firm transportation on Rockies Express (REX) is expected to create. Last month REX indicated that it might be able to begin such service to three pipeline interconnects in Nebraska and one in Kansas as early as Dec. 15 (see Daily GPI, Nov. 16). But in its latest construction update posted Friday, REX said the service “may be made available to its firm shippers” on or about Dec. 21. “This target date for completion of the facilities required to provide interim service is subject to continued progress on the work yet to be completed, and assumes that Rockies Express will receive all necessary regulatory approvals to place the system into service as far as the ANR delivery point.”
A Rockies marketer said he didn’t perceive all that much disappointment about the REX delay on interim service. After all, Rockies producers have waited for years on something like REX to help improve their netbacks, so a few more days won’t hurt that much, he pointed out.
Tuesday demand was pretty decent, but nothing out of the ordinary, the marketer said. There’s some snow in the Rockies, but nothing like the ice storms to the east, he added.
“The ice storm cometh,” proclaimed an LDC buyer in the Lower Midwest. As of Monday afternoon her area was having none of the problems to the east that were knocking out power for hundreds of thousands from Oklahoma to western Illinois (see story in Power Market Today). However, one ice storm had passed over the company’s service territory during the weekend, and another one was on the way late Monday night, she said.
The ice storms presented no problem for her company’s distribution operations, the buyer said, but staffers were busier than usual Monday laying in extra gas both for local heating load and to make sure there’s enough for the gas-fired generation units in the area.
The 2007 Atlantic hurricane season may have officially passed, but Mother Nature pays no attention to a calendar. A broad area of low pressure was centered just east of the Virgin Islands and about 130 miles east of San Juan, Puerto Rico, the National Hurricane Center (NHC) said Monday afternoon. “While a tropical or subtropical cyclone could form at any time during the next 24 hours, upper-level winds are expected to become gradually less favorable for development over the next couple of days,” NHC said.
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