Even with northern market areas still battling to dig out from under weekend winter storms and more on the way in some sections, as well as very cold weather having settled in almost everywhere else, prices fell at virtually all points Monday. More moderate, albeit still frigid in many cases, temperatures were in the Tuesday forecast for several regions, with warming trends due to continue later in the week.
Friday’s 21.4-cent drop by January futures contributed more bearish pressure for the cash market Monday.
Iroquois-Waddington was the only trading location able to eke out a gain. The overall market saw losses ranging from about a nickel to nearly $4.10. Sumas joined Northeast citygates in recording triple-digit plunges.
The cash market will have modestly negative screen guidance Tuesday after prompt-month futures finished Monday down 4 cents (see related story).
Winter “officially” began Sunday, but to many its typical weather had arrived previously. Only central and southern Florida had any semblance of warmth left Monday morning.
Signs of the impending drop in weather-related demand included Transco saying it will lift Tuesday an Imbalance OFO that began Sunday, and Northern Natural Gas planning to end a System Overrun Limitation Tuesday that also had been in effect since Sunday (see Transportation Notes).
The South had stayed relatively mild through Saturday, but got its own taste of wintry weather starting Sunday. Sub-freezing lows were still hanging in there Monday in the region’s eastern end, but temperatures in the 40s are due Tuesday, and toward the west some sections of the Gulf Coast will get as high as the 60s and 70s, The Weather Channel (TWC) said.
Most of the Midwest and Northeast can expect to stay below freezing Tuesday, but that will still represent slightly milder conditions than what they had been experiencing. Massive amounts of snow, sleet and freezing rain were still wreaking havoc Monday with transportation and power in both regions, but they should start seeing some relief around Wednesday.
Prices fell throughout the West despite another snowstorm predicted for the Rockies Tuesday, with two more storms predicted to hit the West Coast Tuesday evening. “This could be the first White Christmas in Portland (OR) on record,” TWC said.
Southern Natural Gas and El Paso had reported maximum injections last week at their respective storage facilities while the industry nears the heart of the traditional withdrawal season (see Daily GPI, Dec. 19). Northwest joined the chorus of pipes reporting additions to storage at a relatively unusual time of year, saying injections at a facility on its system had allowed it to lift a couple of entitlements during the weekend (see Transportation Notes).
A Gulf Coast trader noted that the Dallas-Fort Worth area was still freezing Monday, but was going to get near 60 Tuesday. She didn’t see any cold again in the forecast until January. She confessed to being a bit surprised that northern market-area prices were so soft because those areas were still going to see at least another day or two of very cold weather. However, she said Northeast temperatures are expected to be back in 40s by Christmas and even warmer on the following weekend.
The trader said her company was “nearly wrapped up” on January baseload business Monday afternoon. It did all of its January deals at index flat, she said, but had made a TGT Zone SL sale at index plus 0.25 cent Friday. She reported seeing the same point trade slightly higher on ICE at index plus 0.5 cent Monday.
She said it seemed like a lot of the company’s trading partners also wanted to finish January business before Christmas, but that’s probably because they also tended to index most or all deals. Those who do more fixed-price or basis trading may want to wait until next Monday to see where January futures settle before finishing bidweek activity, she said, “but that doesn’t matter so much when you’re indexing.”
Thirteen more drilling rigs left the search for natural gas in the U.S. during the week ending Dec. 19, lowering the total to 1,366, according to the Baker Hughes Rotary Rig Count (https://intelligencepress.com/features/bakerhughes/). Two rigs were added in the Gulf of Mexico, but 15 were inactivated onshore, Baker Hughes said. Its latest tally was down 10% from a month ago and 7% less than the year-ago level.
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