With the latest in a string of widespread blasts of cold weather due over the weekend, prices were higher at a modest majority of points Friday. The cash market also drew support from the previous day’s 10.8-cent extension of recent strength in March futures.
Flat or close to flat numbers were recorded again at many locations. The Northeast, which could expect a stormy weekend with moderately cold temperatures Saturday changing to much colder Sunday, was way out in front of gains that ranged from 2-3 cents to about $1.35. Otherwise prices were flat to down about 30 cents. The West, with its generally moderate weekend forecast, saw most of the mild softness.
Three New England citygates averaged around $10 or slightly higher, and the fourth (Dracut) was barely shy of a $10 average. However, the day’s top quote of $10.50 was claimed by Transco’s non-New York City Zone 6 pool.
Predictions of sub-zero lows Saturday were common in much of the western Midwest, but temperatures were expected to bottom out in only the teens in Ohio and Michigan. That was reflected in double-digit gains at four Midwest citygates but upticks of less than a dime at the two Michigan delivery points.
The eastern half of the South was due to see lows close to freezing Saturday, but conditions would be quite a bit more moderate toward the western end. For example, the New Orleans low was predicted to be around 43, while Houston could expect spring-like conditions with a high of 76 and a low of 50.
As it had expected, Columbia Gulf was able to bring Line 200 back on-line Thursday evening at the Hartsville (TN) Compressor Station, which was heavily damaged Tuesday night by an explosion caused by a tornado (see Daily GPI, Feb. 8). That raised bypass capacity to approximately 1.3 Bcf/d. The pipeline expected to restore Line 100 to service sometime during Friday’s gas day, which would further raise the capacity to about 1.5 Bcf/d. Total system capacity may continue to be limited for some time due to what looks to be an extended loss of the compressor station, spokesman Kelly Merritt said.
Rockies producers will have to be patient for a while longer before receiving full service on Rockies Express (REX)-West. The Echo Springs Lateral was placed into service Thursday. However, the often-delayed start-up of full REX-West operations to the segment’s terminus at a Panhandle Eastern interconnect in Audrain County, MO, most recently had been expected to happen in early February, but now the date is anticipated to be sometime in March (see related story). The latest delay was attributed to “extreme weather conditions.”
One source had this slightly sarcastic comment: “To listen to them [REX sponsors], you’d think REX was being put in over the top of Mount Everest. This is Kansas and Missouri we’re talking about, right?”
A Houston-based marketer said he didn’t know if Columbia Gulf was allocating receipts due to its limited capacity, but he didn’t consider it a big issue. When the pipeline temporarily suspended receipts Wednesday, a lot of gas nominated into Columbia Gulf got redirected into ANR at the Perryville Hub in northeast Louisiana, he said. That still remained as a viable option Friday, he said.
The marketer noted that pipeline constraints were piling up as a result of the weekend cold (see Transportation Notes). Even with Friday’s strong screen support (a further increase of 19.9 cents), he said he expects softer prices Monday because most areas will already be in warm-up mode by then. This latest cold snap is pretty much limited to the weekend only, he said.
A Midwest utility buyer said that although temperatures sank as low as the teens Friday in his area, the “real cold” would not arrive until a front got there Saturday afternoon. A sub-zero low was in the forecast for early Sunday, he said. Naturally, his company was laying in extra spot gas for the weekend to deal with such frigid mercury levels, he added.
Even with the harsh cold, Midcontinent/Midwest price gains were not that big because the weekend loss of industrial load partially offset the increase in heating load, the buyer continued. There probably would have been bigger increases during a weekday period, he said.
Noting that Northern Natural Gas had declared a System Overrun Limitation (see Transportation Notes), the buyer described System Management Service (SMS) as “no-notice service that goes away during an SOL.” It used to be that every time an SOL was called, SMS was always set at zero, as it was in the current case, he said. But in recent months Northern has occasionally allowed 25% or 50% SMS levels during an SOL depending on which market area it was, he added.
The number of drilling rigs seeking natural gas in the U.S. fell by eight to 1,424 during the week ending Feb. 8, according to the Baker Hughes Rotary Rig Count (https://intelligencepress.com/features/bakerhughes/). All of the dropouts were onshore; the Gulf of Mexico tally remained unchanged at 52. The new count was up 1% from a month earlier but down 3% from the year-ago level, Baker Hughes said.
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