Prices rose by double-digit amounts at all points but one Monday. Colder weather was returning in most of the East and the previous Friday’s 34.9-cent jump by February futures provided additional support for Monday’s cash market. The return of industrial load from its typical weekend hiatus also played a role in the price strength.
Flat quotes at Dracut in the Northeast were the sole exception to overall price bullishness. Gains ranged from about a quarter to 80 cents or so, and were fairly consistent across geographic market areas.
Tuesday’s cash market will continue to have prior-trading-day futures support, although less than before, after the February contract gained another 10.1 cents Monday (see related story).
Despite the eastern frigidity, several pipelines were removing OFOs or other restrictions related to last week’s surge of cold weather (see Transportation Notes).
El Paso, which had been having issues with high linepack at the end of last week, said Monday linepack had returned to normal systemwide.
Monday’s price increases came despite forecasts of rising temperatures Tuesday in the South and Midwest. Lows will still be in the vicinity of freezing in the Midwest, but some parts of the South can expect a return of relatively pleasant highs in the 70s.
Snow, sleet and freezing rain will move into the Mid-Atlantic Tuesday, while temperatures will be falling substantially in the Northeast.
The Rockies will see a mix of slightly lower and slightly higher temperatures Tuesday, according to Madison, WI-based Weather Central. The flood-plagued Pacific Northwest will get more problems as heavy rain and rising temperature levels lead to melting of snowpacks, The Weather Channel said. “The specter of significant river flooding will increase sharply, especially in western Washington,” it added.
Some credited the colder eastern forecasts for lifting futures Monday, but a Gulf Coast trader thought the natural gas contract had gotten some help from surging February crude oil numbers. She said the oil spike was likely based on Middle Eastern unrest after Israel’s ground invasion of the Gaza Strip over the weekend and the Iranian official who urged OPEC members to halt oil exports to the countries that support Israel.
In addition to northern market-area demand, Gulf Coast prices got some extra load from cold weather having moved into South, the trader said. She noted that Houston wasn’t expected to get above the mid 40s Monday and the Dallas-Fort Worth area averaged about 10 degrees less than that. However, she said, a warming trend will be under way in much of the South Tuesday.
The trader said she expects higher prices again Tuesday based on northern heating load and Monday’s continued screen support. The cold might not be enough to extend the rally beyond Tuesday, though, she said.
She noticed a considerable increase of trading activity Monday as many have finished their holiday vacations. Some others are having to gear up for a five-day workweek again after having holiday interruptions in each of the two previous weeks, she said.
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