Weekend forecasts of snow and icy conditions in northern market areas stretching from the Rockies to the Northeast and substantive prior-day screen support were unable to keep most of the cash market from softening Friday. More moderate weather across the southern third of the U.S., a slight warming trend in the Northeast, traders eschewing spot gas purchases in favor of using storage and the usual weekend loss of industrial load were considered the chief factors in the declines.
Gains of up to about 35 cents in the Rockies and a flat ANR Southwest constituted the exceptions to overall weakness. Northeast citygates took the biggest hits amid drops ranging from a little less than a nickel to about $2.10. The Midcontinent, Southwest basins, California and Pacific Northwest recorded nearly all of the single-digit declines.
Even after triple-digit losses, Transco Zone 6-New York City, Iroquois Zone 2 and the Algonquin citygate continued to maintain $10-plus averages. Friday’s top quote was $14.25 in the New York City pool.
The weekend was expected to gladden the hearts of skiing enthusiasts with several feet of snow expected through Monday across the Rockies, The Weather Channel (TWC) said. Wintry precipitation also was in the forecast for the Midwest and Northeast, although ice would tend to be more prevalent in those regions, according to TWC.
But it was due to feel more like early to mid-autumn in the South, with temperatures expected to run 15 to 25 degrees above average and highs mainly in the 70s and 80s Saturday and Sunday. North Texas would get a return of winter chill by Monday, but the rest of the South would stay fairly warm, TWC said.
“It’s got to be” people using their storage instead of buying new gas causing much of Friday’s softness, said a trader for several Gulf Coast independent producers. Otherwise she couldn’t understand how prices would be so soft with severe winter weather stretching across nearly all of the northern half of the U.S. and Canada through the weekend.
She wasn’t expecting to see any snowflakes in Texas or Louisiana, though. Weekend temperatures would be peaking around 80 in both states except in the Texas Panhandle, and the rest of the South would be almost as warm, she noted.
If the cash market couldn’t stay firm Friday in the face of major northern heating load, it should be pretty difficult to mount a rally in the coming week, the trader said. She was unaware of any areas where wintry conditions will get any harsher and said some moderation is expected toward the end of the week.
Even though it was not a holiday weekend, the market typically gets very quiet between Thanksgiving and New Year’s Day as traders try to make early exits from their offices on Fridays, she added.
The number of drilling rigs seeking natural gas in the U.S. rose by 19 during the week ending Dec. 7, according to the Baker Hughes Rotary Rig Count (https://intelligencepress.com/features/bakerhughes/). Two rigs exited the Gulf of Mexico but 21 were added to the onshore search. The total of 1,482 active rigs was up 2% from a month earlier and 3% above the year-ago level, Baker Hughes said.
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