Nearly unchanged pricing dominated the cash market Wednesday. Most points ranged from flat to a little more than a dime higher or about 15 cents lower as colder weather forecasts in several regions were largely offset by the May futures contract’s decline of 24.5 cents a day earlier. Declining quotes handily outnumbered gains.
The exceptions to the generally softer price trend were Rockies points that continued to recover from Monday’s plunges (which were based on regional storage and transportation constraints) with advances ranging from about 15 cents to a little more than 45 cents.
It may be early spring, but it will feel closer to mid-winter Thursday in the Northeast, Midwest and parts of the South and the upper West. Snow is expected in some sections of the Northeast and Upper Midwest; forecasts for snow in the Rockies were iffy, with the possibility that only cold rain would result. Snow was not predicted for the South, but low temperatures in the 30s for much of the region will definitely be well below seasonal norms.
“It’s real cold,” said a lower Midwest marketer, and it makes it feel even colder when one has been enjoying temperatures in the 70s recently. He thinks the cash market will see a repeat of close to unchanged pricing Thursday. “If we were trading for only one day [flows],” he said, he would expect most if not all quotes to go higher because of strong heating load in the East and Wednesday’s 8.9-cent screen gain. But since the long Easter-Good Friday holiday weekend will come into play, the market won’t be that strong, he predicted.
Panhandle Eastern is doing some compressor maintenance that’s restricting his company to in-path transport, the marketer continued, but that’s not a major constraint and otherwise pipeline flows are normal.
The Calgary area has had “miserable weather” with freezing temperatures for the past week, said a producer based there. Chicago prices were “relatively strong,” he said, but he sold for an average of around $7.40 at UDEL, which is a point upstream of the various area citygates. That was about a nickel below NGI‘s citygate average.
Like the marketer, he thought the extra loss of industrial demand for a holiday weekend should counteract strong weather fundamentals, and thus he also expects overall neutral pricing Thursday.
Next week is shaping up as warm in the West and cold in the East. The National Weather Service’s (NWS) forecast for the April 9-13 workweek calls for below-normal temperatures everywhere east of a line roughly paralleling the course of the Mississippi River (but 100 miles or so to the west) before turning southwestward in Arkansas to include all of Louisiana and southeast Texas. The greatest variations below normal are due to occur in the Northeast and Mid-Atlantic. NWS expects above-normal readings everywhere west of a line running southward through the midsections of the Dakotas, Nebraska and Kansas before curving southward through the eastern end of the Oklahoma Panhandle to include most of the Texas Panhandle and ending in the Big Bend area of West Texas.
Reuters said its survey of 21 industry players found an average prediction of a 51 Bcf storage injection for the week ending March 30. Estimates ranged from 37 Bcf to 65 Bcf, the news service said. Bentek Energy weighed in with a forecast of a 59 Bcf build. Citigroup analyst Tim Evans thinks 40 Bcf was injected last week and expects another 5 Bcf addition for this week, but then he believes the cold weather expected throughout the East next week will result in a 30 Bcf withdrawal for the week ending April 13.
©Copyright 2007Intelligence Press Inc. All rights reserved. The preceding news reportmay not be republished or redistributed, in whole or in part, in anyform, without prior written consent of Intelligence Press, Inc.
© 2020 Natural Gas Intelligence. All rights reserved.
ISSN © 1532-1231 | ISSN © 2577-9877 |