Even with sub-freezing low temperatures continuing to be predicted for Thursday from the Northeast through the Midwest and Upper Plains into the Rockies, prices fell at nearly all points Wednesday. Relatively moderate weather across most of the southern half of the U.S., increasing storage burns and the sixth consecutive day of futures weakness on Tuesday were the chief instigators of the market downturn.
A few scattered instances of flat quotes were the exceptions to losses ranging from about a nickel to $2.50 or so. Northeast citygates scored all of the triple-digit declines as they descended from the rarefied price heights with which they began the week.
The Northeast got a major reinfusion of supply that couldn’t have been counted on during Tuesday’s trading. A problem with heat exchanger equipment at the Sable Offshore Energy Project (SOEP) offshore Eastern Canada was resolved Tuesday night, a spokesman said Wednesday, and SOEP has resumed making deliveries into Maritimes & Northeast. SOEP production had been running at 450-480 MMcf/d prior to the weekend outage.
Dracut, the Massachusetts terminus of Maritimes & Northeast, dropped about 90 cents Wednesday.
Thursday’s cash market will have minuscule prior-day screen support after January futures broke their losing streak with a 3-cent rally Wednesday.
While relief from frigid conditions remains absent from the near-term forecast in northern market areas, mild to cool weather in Florida and from the western end of the South through the Southwest is dampening heating load in those areas. The eastern South has turned rather chilly again, though, with lows on either side of 40 predicted for Tuesday in Atlanta and Birmingham, AL.
Western Canada is in the deep freeze, and NOVA Inventory Transfer (NIT) and Westcoast Station 2 reflected that with two of Wednesday’s rare flat showings. A Calgary-based producer said temperatures were hovering around zero (Fahrenheit) in his area. However, he noted that in the general market prices “sure didn’t respond positively” to the cold weather. That led him to assume that increased storage withdrawals were supplanting purchases of new spot gas, saying, “We’ll get some idea of that” from Thursday morning’s EIA report.
The producer is sure about heavy use of storage in his own NIT trading bailiwick. The companies that report it have been pulling a combined 3 Bcf/d out of Aeco C storage in recent days, he said.
Noting that no Florida Gas Zone 3 deals were posted on IntercontinentalExchange Wednesday, a Florida utility buyer said he would guess Zone 3 at $7.35-40 in non-ICE trading (that was a nickel or more under NGI‘s Zone 3 average of about $7.45 in thinly reported quotes; the drop of about a nickel was among Wednesday’s smallest). There’s low demand in Florida for now with temperatures peaking in the 70s, he said, but of course it has to compete with the cold in the Northeast and Mid-Atlantic for some Gulf Coast supplies. He noted that as usual it’s a fairly quiet market during the interval between Thanksgiving and Christmas.
It was still miserably cold in the Upper Midwest, said a marketer in the region. She had hoped for some relief soon but said the latest six- to 10-day forecasts indicate that the Midwest will stay mostly near freezing through late next week.
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