Prices continued to fall at nearly all points Friday, with previously spiking Northeast citygates taking part in the general softness. The previous Wednesday’s bearish storage report and the accompanying 23.7-cent drop by February futures that day were the primary cash market depressants, abetted by moderating weather trends in the South, Midcontinent and parts of the Midwest along with the weekend’s typical decline of industrial load.
A single gain was the exception to the majority losses that ranged from about a nickel to the $2.30 area. Although sub-freezing lows would persist into the weekend in the Northeast, regional citygates recorded Friday’s biggest drops as some relief from winter storms was due toward Sunday and Monday. However, the Northeast can expect a return of more wintry weather by midweek as another storm moving east from the Midwest converges with one moving up from the South, according to The Weather Channel (TWC).
Sections of the Lower Midwest were due to see their first above-freezing low temperatures in as much as two weeks over the weekend. But toward the Canadian border near-zero conditions would remain, TWC said. Northern Natural Gas, which planned to implement two System Overrun Limitations Sunday (see Transportation Notes), projected that its system-weighted temperature average would slip to five degrees Sunday before rebounding to 14 degrees Monday.
Mild, somewhat spring-like highs in the 60s and 70s were in the weekend forecast across the South, although some locations would still shiver with overnight lows in the 30s.
The Rockies enjoyed more moderate temperatures Friday, but its respite from the cold would be brief. Lows would be plunging into the teens in Denver Saturday after the city peaked around 60 Friday. The Pacific Northwest was due to get a short break Saturday from a recent spate of winter storms, TWC said, but a new storm would be brewing in the region Sunday before a change to milder temperatures begins Tuesday.
El Paso, which had been experiencing problems with low linepack as last week began, said Friday it had set the probability of declaring a Strained Operating Condition or Critical Operating Condition to high due to high linepack. Kern River, which had reported low linepack in the downstream half of its system prior to New Year’s Day, said Friday linepack had returned to normal systemwide.
Monday’s cash market will have ample prior-trading-day screen support after the February futures contract soared by 34.9 cents Friday (see related story).
After predicting normal temperatures for most of the U.S. in its six- to 10-day forecast for the Jan. 5-9 workweek posted Tuesday afternoon (see Daily GPI, Jan. 2), as of New Year’s Day the National Weather Service (NWS) had changed its outlook for the latter half of the week. It now expects below-normal readings from Wednesday onward everywhere except Maine east of a line running from Michigan’s Upper Peninsula southward to eastern Louisiana. NWS also predicts above-normal temperatures later this week in roughly the western third of the nation.
Trading was “pretty quiet” Friday, especially since a lot of people were still out on holiday vacations, a Houston-based marketer said. The cash market should be quite a bit more active Monday with many traders returning to duty, he said, adding that for some it will be the first time back in their offices since before Christmas.
Being unaware of any other bullish factors, the marketer said he had to assume that Friday’s futures spike was based on the change to colder forecasts in the eastern U.S. late in the coming week. Those predictions and the screen strength should translate into higher cash prices Monday, he said.
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