Warming trends due Thursday in the South along with much of the Midwest and Rockies caused enough diminution of heating load to push prices a few cents lower at a modest majority of points Wednesday. However, forecasts of windy snow showers and lows generally in the 30s kept quotes moving much higher in most of the Northeast, with several citygates again recording dollar-plus advances.
Expectations of further growth in the storage surplus compared to the five-year average being reported by the Energy Information Administration Thursday may have been a bearish influence for some non-Northeast traders.
A majority of locations saw relatively small losses ranging from 2-3 cents to about a dime. Several scattered points in other regions joined the Northeast in being flat to about $1.60 higher. Although Transco Zone 6’s New York pool claimed Wednesday’s top average gain while the Algonquin citygate rose less than a dollar, Algonquin again had the highest peak quote of $6.90.
Although the Line 300 average in Tennessee Zone 4 still lags behind those of other Northeast pipes, it was no longer experiencing the sub-$2 lows that had shown up occasionally last week. The low end of Line 300’s range was $2.65 Wednesday.
Prompt-month futures went off the board with a drop of 2.8 cents to $3.084 (see related story). January’s closeout is 28 cents below the $3.364 December settlement.
Westcoast reported that its linepack was beginning to drop to undesirably low levels.
It definitely feels like winter is putting in a belated appearance, said a marketer in the Upper Midwest, adding that a snowstorm in the area Tuesday had left freezing temperatures in its wake Wednesday. However, he said, local experience shows that a late start to very cold temperatures usually leads to an earlier end of them because the waters of the Great Lakes have less time to chill enough to produce lake-effect snows.
The marketer said his company bought January baseload at last-day settlement basis of plus 20 cents into Consumers Energy and plus 23 cents into MichCon. It expects a little more heating load in January than it experienced during December, he said, “but not much” more.
A utility buyer in the South said the company’s service area was expected to enjoy pleasant highs in the 60s going into the New Year’s weekend, but substantially colder conditions should return early in January. At least the holiday weekend likely will be nice before heating load gets heavy again, he added.
Despite the overall price downturn Wednesday, Bentek Energy’s U.S. Natural Gas Hub Flows chart showed nominated volumes increasing for that gas day at 13 of the 23 points it covers. The biggest gains included the Chicago citygate, up 242,000 MMBtu (11%); Waha, up 227,000 MMBtu (34%); Texas Eastern M-3, up 213,000 MMBtu (6%); Questar, up 208,000 MMBtu (17%); Columbia Gas, up 195,000 MMBtu (4%); and Northern Natural-Ventura, up 120,000 MMBtu (11%). The only major decline, Bentek said, was at Malin, down 237,000 MMBtu (19%).
Stephen Smith of Stephen Smith Energy Associates is projecting a storage pull of 84 Bcf for the week ending Dec. 23. Citi Futures Perspective analyst Tim Evans said he expects a 74 Bcf withdrawal.
January bidweek prices continued to slide in trading on the IntercontinentalExchange (ICE) platform. El Paso-Permian averaged $3.03 Wednesday, down about a nickel from Tuesday, ICE said. But the PG&E citygate fell only another 2 cents or so to about $3.41 after having dipped about 9 cents on Tuesday.
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