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Most Points Still Falling; Northeast Spikes Again
Prices continued to fall at most points Wednesday in trading for flows during the first two days of 2009. The cash market overall was pressured lower by moderating weather trends in some areas, Tuesday’s 22.5-cent drop by February futures in their debut as front-month contract and the holiday impact of less gas demand.
Losses ranged from about a nickel to 85 cents or so. The Midcontinent and Rockies cornered the lion’s share of the biggest drops.
As on the previous day, spikes at Northeast citygates ran contrary to the general market grain, but they were joined Wednesday by a few flat to about a dime higher points in the Gulf Coast. The Northeast gains were as high as $1.52 at Iroquois Zone 2. Heavy Wednesday snowfalls in the region were expected to subside to some extent Thursday, but two new systems were expected to bring snowy conditions back from late Thursday through the weekend. Northeast lows were predicted to keep falling Thursday and range from single digits through the teens and 20s.
The Midwest and Midcontinent were predicted to see rising temperatures Thursday, although Midwestern lows would still be below freezing in nearly all cases.
The forecast for the South was a mixed bag. Generally the eastern half of the region was expected to see lower highs and higher lows around the freezing level Thursday, while the western half could anticipate mostly higher temperatures with lows above freezing.
Slightly colder weather was anticipated for the Rockies, while the Pacific Northwest was due to remain stormy but see modestly higher temperatures.
The Energy Information Administration’s report of a 143 Bcf withdrawl from storage during the week ending Dec. 26 fell short of the consensus expectation in the low to mid 150s Bcf. Although the volume could easily have been considered bullish relative to a five-year average pull of just 100 Bcf, the relatively few active Nymex traders took a bearish view and sent February futures 23.7 cents lower (see related story).
Dominion added OFOs in its Mid-Atlantic service area to the ones it had announced earlier in New York state (see Transportation Notes).
Kern River continued to report low linepack Wednesday in the two farthest downstream segments of the four on its system.
“We were due one,” a Midcontinent producer said of the below-expectations storage withdrawal a week earlier. He added that he had been very close to the actual number in estimating a draw of 142 Bcf. Heating degree days were generally high during the week ending Dec. 26, he said, but not so much in the densely populated regions.
The producer said he expects spot prices to fall again Friday, particularly in the Midcontinent where pipelines are running full or close to it. But he reported hearing that some arctic air was on its way to the region following a fairly mild weekend.
A western trader also expected mostly softer prices again Friday, citing a litany of reasons — some moderation of cold weather, Wednesday’s screen weakness, the bearish nature of the storage report and the usual weekend drop of industrial load. Despite softness throughout the West Friday, he noted that there was a fair amount of New Year’s day heating load in California, and even more to the north in the stormy Pacific Northwest and Western Canada. It was a “straightforward” January bidweek, he added.
The National Weather Service (NWS) expects normal temperatures to prevail in most of the U.S. during the Jan. 5-9 workweek. It predicted below-normal readings only in the Four Corners area — virtually all of Arizona and New Mexico along with southwestern Colorado, southern Utah and the southeastern corner of California. Above-normal temperatures are expected in all of the Northeast except for southern New Jersey and the southwestern half of Pennsylvania, NWS said. It also looks for above-normal conditions in all of Washington state and Oregon along with the northern half of Idaho and a strip along the northern end of California.
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