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Most Points Up; Northeast Slide Ignores Imminent Storm
Even with a severe winter storm bearing plenty of snow and ice bearing down on the region, triple-digit plunges by Northeast citygates were the only significant exceptions to overall firmness in the rest of the cash market Tuesday. Heating load remained plentiful for Wednesday as the storm left power outages and sheets of ice behind as it departed the Midwest and Midcontinent for its move into the Northeast and Mid-Atlantic.
A large majority of points outside the Northeast were flat to a little more than 35 cents higher. The biggest gains occurred in the Southwest producing basins. Losses ranged from a little less than a nickel to nearly $2.60; only four were at a trading location other than a Northeast citygate.
The storm was already starting to arrive in the Northeast late Tuesday and would be around for most of Wednesday before moving out into the Atlantic, which caused some head scratching over the weakness of delivered prices for Wednesday.
“From Tuesday evening through Wednesday a large area from Indiana to New England will pick up several inches of snow, with more significant accumulations possible, significant in the sense of a foot or more,” said AccuWeather.com forecaster Justin Roberti in a Tuesday morning message. “The heaviest snow from the storm will stretch from northeastern Pennsylvania into northern New England. Portions of the Mid-Atlantic will have their heaviest snow of the winter so far.
“The storm will also produce a major ice event from the Ohio Valley into the Mid-Atlantic region. The buildup of ice will no doubt bring down trees and power lines. In some areas of the Midwest and the central Appalachians, it could very well be a crippling ice storm.”
Although it will still be very cold Wednesday in the Midwest, a warming trend is under way. Although Midwest citygates were able to soften under similar conditions a week earlier, this time they were flat to up about a nickel.
Signals of weather moderation on the horizon came as pipelines to both the Midwest and Northeast continued to shed service restrictions related to the latest blast of cold (see Transportation Notes).
Southeast and South Texas were enjoying almost spring-like weather Tuesday afternoon, but they will be joining the rest of the South (except for Florida) in substantially colder temperatures from Wednesday onward. Southern Natural Gas said a Type 6 OFO for short imbalances was “too close to call” for Thursday but “highly likely” Friday.
Severe cold in the West will remain confined largely to the northern mountain areas, but obviously California demand was on the rise. On the same day that a high-linepack OFO expired on the SoCalGas system, PG&E was issuing a low-inventory OFO for Wednesday (see Transportation Notes).
It’s still cold, but warmer than before, said a Midwestern utility buyer. That meant her company’s gas throughput was dropping a bit, but to her it felt good to be more comfortable personally again. Northern Natural Gas removing its two System Overrun Limitations Wednesday was giving the utility “some breathing room” in scheduling gas, she said. (Price movement at Northern’s demarc and Ventura trading points was among the weakest outside the Northeast, with Ventura down 2-3 cents and demarc up by a similar amount.) She looked forward to even warmer weather next week.
The buyer said the utility is not buying any February baseload, figuring that it will be OK with gas already under winter term contracts and storage use.
The National Weather Service (NWS) predicts relatively mild conditions for many areas in the Feb. 2-6 workweek. In its six- to 10-day forecast posted Tuesday afternoon, the agency said it looks for above-normal temperatures almost everywhere west of a line running southwestward from the southeast corner of Michigan to southern Illinois, where it turns to the south through eastern Arkansas and Louisiana. The only exception, where normal readings are expected, is in the western halves of Washington state and Oregon, along with the northwest corner of Nevada and the northern third of California. The only area where NWS expects below-normal temperatures is all of Florida (except the western half of the Panhandle) and the southern end of Georgia.
Stephen Smith of Stephen Smith Energy Associates projects a storage draw of 194 Bcf to be reported for the week ending Jan. 23.
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