There was still a pretty large amount of heating load remaining Monday, but the relative overall moderation from last week allowed prices to plunge by large amounts at all points. Northeast citygates, which had constituted the only stronger market area Friday, led the descent with multi-dollar dives; Transco’s two Zone 6 pools fell by about $6 or a little less.
Losses ranged from a little more than a nickel to about $6; nearly all were in double or triple digits. The Florida citygate was by far the highest-priced point at nearly $15 as a freeze, which reportedly has damaged much of the state’s citrus crops, prompted Florida Gas Transmission to keep an Overage Alert Day in effect at least through Monday.
The cash market already had negative guidance from last Friday’s 5.7-cent drop by prompt-month futures; it will get even more Tuesday after the February contract plunged another 29.5 cents Monday (see related story).
Cold weather-based pipeline constraints were starting to “melt” as heating loads receded (see Transportation Notes).
The Weather Channel (TWC) said one more “brutally cold night” was in store for the eastern Gulf Coast and Florida, but “the worst of this cold spell is just about over.” Another cold air mass will delay part of the region’s expected warm-up for a day, TWC said, but warmer air should begin moving into Texas, the Gulf Coast and Florida Tuesday with afternoon highs in the 50s and 60s.
Meanwhile, temperatures will stay below freezing Tuesday for the most part in the Midwest and Northeast, but in many cases this will represent a modest warming from the conditions that existed last week. And the Rockies can expect relatively balmy highs in the 40s and 50. Calgary is due to peak in the mid 40s Tuesday, but Edmonton will just barely clear the freezing level, according to Madison, WI-based Weather Central.
The “deep freeze” in North America was ending and gas prices took a big fall as a result, a Midcontinent producer said. He had been selling into Oklahoma intrastate OGT in the $8.50-9.00 range last week, but the mid $5.60s was the going price Monday, he said.
The producer said he had to believe that a lot of storage withdrawals were behind Monday’s major softness. Storage deliverability couldn’t meet the heating demand last week, he said, but now he suspects it’s more than needed. It got warmer than expected in the Midcontinent Monday, he said; Oklahoma City got up to 55 that afternoon after one forecaster had projected a local high of only 49.
Twenty-two units joined the roster of drilling rigs actively searching for natural gas during the week ending Jan. 8, according to the Baker Hughes Rotary Rig Count. All of the additions were onshore, with the Gulf of Mexico tally being unchanged. The new total is 781. The Baker Hughes count is up 3% from a month ago but 37% less than the year-earlier level.
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