Increasing heating load in the Northeast and much of the South combined with continuing sub-freezing lows in the Midwest (although that region is in a modest warming trend) to cause price gains Monday at most points.
The slight increase of 1.9 cents by May futures Friday and the return of industrial load from its typical weekend decline gave additional, albeit modest, bullish support for the cash market.
Most points were flat to about 60 cents higher, with Northeast citygates recording all of the largest increases.
By far the largest of minority losses ranging from a couple of pennies to about a quarter were in the Rockies. Although lows below freezing remained in the Tuesday forecast for parts of the Rockies, the region’s overall temperature trend is upward and daytime highs are fairly moderate for mid-April. For example, Denver is one of the sections that will stay above freezing Tuesday and is due to see a high of nearly 70.
Next-day cash guidance from futures turned negative Monday after the May contract fell 6.9 cents (see related story).
Although parts of the southern end of the Northeast will keep avoiding freezing lows, it will be getting colder, while upstate New York and New England can expect lows around freezing or slightly less. Snow is expected in some sections, The Weather Channel (TWC) said.
And even though overall temperatures will be rising, snow is also in the Tuesday forecast for much of the Midwest and conditions will still be very cold. Highs across the Ohio Valley and Great Lakes will only reach into the 30s and 40s, which is 10 to 25 degrees below early April averages, TWC said.
Even the South is getting in on the cold weather act again. Although some parts of Texas will start warming again Tuesday after a chilly and windy Monday, lows will be well below average Tuesday in most areas of the South, according to TWC. Some locations will approach records, TWC said, including Tulsa, Austin, TX, Shreveport, LA, and Mobile, AL. “Wednesday will be another cold morning in the Southeast with lows in the double digits below average,” the forecaster continued. “This will result in widespread 20s and 30s. After this chilly morning, temperatures will moderate through the rest of the week.”
As usual, most of the West’s coldest weather is concentrated from the Rockies through Western Canada, and even those areas are fairly moderate for this time of year.
Tennessee indicated that colder weather will continue in the Northeast over the next few days, warning shippers of a possible OFO for negative imbalances.
A Northeast utility buyer confirmed that it will be “pretty cool for the next few days,” and there was snow in the overnight forecast for his area. There’s still enough heating load “that we’re continuing to withdraw from storage in early April,” he said, adding that some time during the month the area will transition into moderate springtime temperatures.
A marketer said he expects slight softness at most points Tuesday because he doesn’t think there will be enough midweek heating load to keep Monday’s screen drop from being a minor drag on the cash market. Other than several small constraints on Tennessee, he was unaware of any significant transport constraints.
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