Prices continued to rise in most of the cash market Wednesday, but a large majority of the increases were about a dime or less. There is still plenty of cold weather from the Northeast through the Midcontinent/Midwest and Plains to the Rockies, and the South is starting to make a much more significant contribution of heating load.
Most points were flat to about 20 cents higher. In losses ranging from 2-3 cents to nearly $1.15, Northeast citygates again took the biggest hits but their declines were much smaller than on Tuesday.
February futures went off the board Wednesday with a small loss of 2.7 cents (see related story). That portends triple-digit losses in February first-of-month indexes, as the contract’s expiry at $4.476 is $1.608 less than the January settlement of $6.084.
Pipeline restrictions related to frigid temperatures had been disappearing earlier in the week, but are starting to reappear in some cases. And whereas the previous restrictions had been by pipes serving the Midwest and Northeast market areas, Southern Natural Gas plans to implement an OFO Friday, saying “significantly colder weather” was forecast in the Southeast from Wednesday evening through Saturday (see Transportation Notes).
The snow and ice storm that caused so many problems for the nation’s midsection was bringing near-freezing lows to much of the South already, and as Southern Natural Gas indicated, those will continue into the weekend.
Northeast delivery points had managed to record plunges Tuesday with a major winter storm on the way, so it was no surprise that they could continue to dive Wednesday when the storm was expected to have moved out to sea Thursday. However, as AccuWeather.com’s Justin Roberti cautioned northern New England residents Wednesday afternoon, it wasn’t quite over for them yet. Heavy snow would continue in the area for several hours Wednesday night, Roberti said, “with total accumulations reaching 12 to 18 inches. The excessive snowfall will spread into Maritimes Canada as well.” Even after the storm departs, he added, the weather left behind will be cold.
The Midwest forecast was mixed, but generally called for slightly warmer on the east side but colder to the west. For instance, Chicago could expect to see Wednesday’s high around 20 rise to nearly 30 Thursday, according to Weather Central, but in Des Moines, IA, while the high was predicted to rise from 22 to 24, the low of about 17 Wednesday.
Western lows Thursday will range from the teens in Alberta to the freezing area in the Pacific Northwest to the teens in parts of the Rockies to about 70 in much of the Southwest and Southern California, according to The Weather Channel. Despite the Alberta cold, NOVA said it might be required to change its imbalance tolerance range due to high linepack.
A Midcontinent producer said he’s looking for a much larger storage withdrawal to be reported Thursday than most people. The reason? “We have had less [than expected] and even much less than expected draws over the last four weeks, so I think we’re due!” he said. He expects a pull of nearly 200 Bcf, while consensus expectations are about 20 Bcf less.
The producer said some Midcontinent baseload is being traded for February at slightly less than $3, which he hadn’t seen in a long time.
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