Prices skyrocketed to as high as $19.50/MMBtu Wednesday in the Northeast as low temperatures ranging from single digits to the 20s were forecast to keep the region chilled out Thursday. But with warming trends due in the South and Midwest while the West essentially maintains its status quo of seasonably cold to mild conditions, the market outside the Northeast saw mixed price movement that was mostly close to flat and biased toward the downside.
Delivered prices in the Northeast jumped by multi-dollar amounts from a little less than $3 to about $6.60, with Transco’s Zone 6 copping the top average of about $18.45 (Iroquois Zone 2 was close behind at about $18.15). Otherwise, flat (or close to it) quotes were common as non-Northeast points ranged from a little less than C15 cents lower (NOVA Inventory Transfer) to nearly 80 cents higher (Transco Zone 5).
March natural gas futures went off the board on a weak note, falling 27.6 cents to an $8.930 settlement. That will provide negative guidance in Thursday’s spot trading for the last day of February.
Despite freeze warnings being posted for Thursday morning in northern Florida, the South in general will be exiting a brief bout of cold weather. Atlanta’s high is due to rise from about 43 degrees to the mid 50s, while New Orleans can expect about a 10-degree jump to 64. Lows will remain below freezing in the Midwest, but that still represents a moderating trend. For example, Chicago’s low of about 10 Wednesday is forecast to move up to about 27 Thursday.
Conditions are staying fairly moderate in most of the West. Even Denver will continue to see highs in the relatively sultry 50s Thursday.
The Florida citygate recorded one of the top non-Northeast advances of about half a dollar as Florida Gas Transmission kept an Overage Alert Day in place Wednesday and tightened the imbalance tolerance to 15% (see Transportation Notes).
Dominion in Appalachia, by virtue of its dime-plus gain, joined Northeast citygates in averaging above $10.
At least one cold-related OFO-like pipeline constraint is about to end as MRT will lift Thursday a System Protection Warning that has been in effect for nearly two weeks.
Between Wednesday’s big screen drop and it getting warmer in the South, a regional utility buyer said he would expect prices to be mostly softer Thursday. He said he “had to bite the bullet” and buy some baseload supply for March after getting through most of the heating season on storage and term contracts. Earlier this winter his company was worried about not being able to keep up with mandatory storage withdrawal ratchets, he added, but then a colder-than-expected February has gotten it a little ahead of schedule on drawing down storage.
The buyer said he obtained a couple of baseload packages into ANR Southeast at index minus 0.5 cent and index minus 0.25 cent. Offers were plentiful on all three pipelines serving the utility, he added, but he found the ANR gas to be cheapest.
A Florida trader said his company didn’t lose power Tuesday at any of its facilities during the widespread power outages in Florida, but it was called on to supply intraday supply to gas-fired peaking generators trying to make up for electricity losses elsewhere.
In its six- to 10-day forecast for the March 3-7 workweek, the National Weather Service (NWS) predicted below-normal temperatures in a vast section of the central U.S. It forecasts above-normal readings in the Northeast, eastern sections of the Midwest and the Mid-Atlantic to as far south as South Carolina. It also expects above-normal temperatures in the southern half of the Florida peninsula and in the western halves of Washington state and Oregon along with all of California except its southeast corner.
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