Friday’s launch of the February aftermarket was almost evenly divided between rising and falling points, but gains moderately outnumbered the losses. Frigid weather will be returning early this week in some areas, and Friday’s cash market had extra support from the previous day’s increase of 15.6 cents by March futures.
Most points ranged from flat to about 35 cents higher. The Midcontinent along with South and East Texas had most of the largest gains. Northeast citygates, which have consistently constituted the most volatile market area in recent weeks, merited that distinction again Friday as they were way out in front of losses that ranged from 2-3 cents to about $1.35. Tennessee Zone 6 was the only delivery point in the Northeast that failed to record a dollar-plus drop.
Because the new month began Sunday, Friday deals were done for Sunday-Monday flows only. Saturday supplies were covered in trading Thursday.
Although the National Weather Service has predicted above-normal temperatures in nearly all of the western two-thirds of the U.S. during the Feb. 2-6 workweek (see Daily GPI, Jan. 28), there are some indications that parts of the forecast were in error. The Northern Natural Gas system lies entirely within the “above-normal” area, but the pipeline projects that its system weighted average temperature would drop from 18 degrees Sunday to eight Monday. The pipeline also is reinstating two System Overrun Limitations Monday that were allowed to lapse Friday (see Transportation Notes).
Southern Natural Gas also signaled that some weekend weather moderation will be replaced by much colder conditions early this week by ending an OFO for short imbalances Saturday but saying it was “highly likely” that the OFO would be issued again for Tuesday. And The Weather Channel (TWC) said Friday it appears that much of the eastern half of the country could get hit with another winter storm this week.
A Chicago-area source said it was nice to see a Saturday forecast for the first above-freezing low in many days, but it appeared that the Midwest was getting only a two-day “reprieve” from the cold, as frigid conditions were expected to be back at the start of the coming week.
Northeast citygates were able to plunge to averages below $6 because its next burst of very cold weather is not due to arrive until late Monday night and Tuesday.
The western forecast called for sub-freezing lows continuing in the mountain areas and staying around freezing in the Pacific Northwest. However, toasty highs in the low to mid 80s were due over the weekend in sections of the desert Southwest and Southern California, TWC said.
A Gulf Coast trader said her company had no problem with handling split-weekend nominations. “Everybody is used to it” since it’s happened often in the past, she said. The trader said it was difficult to make a call on Monday’s market direction. The screen’s full-year strip was weaker Friday, she noted, but heating load should be increasing substantially as the week begins.
The trader said she saw some February baseload gas still being traded Thursday, but was unaware of any further bidweek activity Friday. Everybody was concentrating on the first couple of days of February, she said.
It was good to see gas prices getting more affordable again, said an industrial end-user referring to the big drops that were expected in first-of-month indexes. He said he had no bidweek problems because supply offers were plentiful.
Florida Gas Transmission had generated a sizeable gain Thursday at the Florida citygate merely by warning about a potential Overage Alert Day (OAD), but the citygate dropped about a dime Friday even though the pipeline actually issued an OAD. Zones 2 and 3 in the production area barely edged higher.
El Paso canceled a warning about a potential Strained Operating Condition due to low linepack, saying Friday its linepack had returned to normal.
The Baker Hughes Rotary Rig Count (https://intelligencepress.com/features/bakerhughes/) found 1,150 rigs active in the U.S. gas search for the week ending Jan. 30 — a reduction of 35 from the previous week. Two rigs were deactivated in the Gulf of Mexico, Baker Hughes said, while the onshore tally fell by 33. Its latest count is down 9% from the Jan. 2 report and a whopping 20% less than on Feb. 1, 2008.
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