As sources had predicted, the cash market fell at most points Friday, pressured lower by warming trends in the Midwest, Midcontinent and South and by the January futures drop of 8.8 cents a day earlier. The usual weekend decline of industrial demand also was a factor in the overall softness.
The Rockies, along with a few points in the Midcontinent, kept mixed price movement in play with numbers that were flat to about 15 cents higher for the most part. A couple of standout exceptions were a spike of about $1.60 at Sumas and one of a little more than C60 cents at Westcoast Station 2. Demand was high at those points due to very cold air moving into the Pacific Northwest over the weekend.
Otherwise, losses ranged from a little less than a nickel to about 80 cents.
Futures will continue to provide negative guidance for Monday’s cash trading after the January contract declined another 11 cents Friday (see related story).
Northeast citygates recorded the biggest drops despite frigid conditions that would continue through Sunday after snow and ice storms had knocked out power to more than a million customers Friday in New England and upstate New York. Saturday’s lows in the affected area were forecast to be in the single digits and teens, with Caribou, ME, expected to bottom out around minus one.
One source suggested that with milder weather due to begin arriving in the Northeast Monday, regional buyers decided to rely on storage pulls (or possibly drafting the pipelines a bit) to tide them over Saturday and Sunday because they expected loads to drop Monday.
An invasion of arctic air into the Pacific Northwest and the northern Rockies would begin Saturday and spill over into the southern Rockies and much of the desert Southwest as the weekend proceeded. Rain and snow could spread as far south as San Diego along the California coast and northern Arizona and northern New Mexico over the interior, The Weather Channel said.
The Midwest, which had seen temperatures dropping Friday, could expect to see a modest reversal Saturday, although mercury levels were still due to be in the vicinity of freezing. Northern Natural Gas indicated how severe a freeze returning to the Upper Midwest at the end of the weekend would be. A bulletin board posting projected that Northern’s system-weighted temperature average would rise to a relatively moderate 31 degrees Saturday, but then sink drastically to 13 Sunday and an even more drastic two Monday.
Milder conditions with highs in the 50s were due to return during the weekend in the western half of the South. The region’s eastern end, where colder weather had arrived later, would have to endure near-freezing conditions for another day before moderating weather arrived Sunday as a cold front moved out to sea.
Midcontinent pipes were trying to rise in early trading but later came off when enough buyers failed to materialize, a producer in the region said. People were still calling Friday afternoon trying to sell gas to him on Panhandle Eastern, he said. For now it’s a “very bearish market” amid milder weather, the producer added, but the coming week should see a return of very cold temperatures in the Midcontinent. He suspected that some of the area utilities were trying to front-load supplies during the weekend to avoid presumably higher prices when the cold returns.
Noting the further plunge of drilling rigs seeking natural gas (see end of story), the producer wasn’t optimistic about any resulting bullishness any time soon. It takes a long time for rig count changes to have any effect, he noted.
A western trader said the cold front moving into the Pacific Northwest should have gotten into Northern California around Sunday, although she thought it probably would have diminished a bit in intensity by then. That might be enough to rally the PG&E citygate and/or Malin Monday, both of which had some of Friday’s smallest losses, she said.
The number of drilling rigs engaged in the U.S. search for gas continued to plummet in the week ending Dec. 12, according to the Baker Hughes Rotary Rig Count (https://intelligencepress.com/features/bakerhughes/). The latest count was down 49 to 1,379. One rig was added in the Gulf of Mexico, but 50 were inactivated onshore, Baker Hughes said. Its latest tally was down 8% from a month ago and 7% less than the year-earlier level.
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