While harsh winter weather had already receded in much of the West and was due to do so to varying extents in the South and Midwest, it was still making itself at home in the Northeast. The result was a continuation of Northeast citygate spikes Tuesday, while the rest of the market either recorded considerably more modest gains or saw declines setting in at quite a few points in the West and Midcontinent.
Transco Zone 6-New York City failed to top its Friday peak of $30, only matching it, but had its average jump over $6 to nearly $23.50. Other delivery points in the region also measured their increases in triple-digit amounts again.
Meanwhile, Gulf Coast pipes continued to see mostly double-digit gains Tuesday, but they were generally only about half of Friday’s advances. The Gulf Coast and Midwest citygates tended to rise between a couple of pennies and nearly 45 cents. The Midcontinent and West had a few points that were flat to about a nickel higher, but otherwise fell from about a nickel to 20 cents (Westcoast Station 2 dropped a little more than C25 cents).
Tuesday was generally free of precipitation for the Northeast, but snow was predicted for much of the region Wednesday to go along with high temperatures ranging from the teens to the 30s. The South was due for a moderating trend starting Wednesday that would get the mercury level as high as about 70 degrees in Texas, according to The Weather Channel. Another little blast of snowy cold could be expected in the northern Plains and Upper Midwest, it said, but otherwise the region was likely to be comfortably above freezing again.
Except for snow in the upper mountain elevations, most of the West will be dry and feeling temperatures well above mid-January averages, TWC said.
Various constraints remained in place on pipes to the Northeast and even on a couple in the South, but none were considered especially severe. Several that had been implemented in the Midcontinent/Midwest area as the bad weather began last week were being lifted (see Transportation Notes).
The reason that Transco Zone 6-NYC often tends to spike higher than other Northeast points is largely due to LDC restrictions “on what gas can be brought in on what pipe” in the metropolitan area, observed a Northeast marketer. Just about everybody is required to buy some Zone 6-NYC supply instead of being allowed to load up on cheaper delivered prices via other pipes, he said. He noted that Zone 6- NYC had a similar price range to Friday’s but a much higher average because a lot more volume was being done at higher prices earlier. Traders got some easing of quotes in later deal, he said.
The marketer said the Northeast can expect “just a little” temperature moderation around Thursday, but then it turns cold again for the weekend, “so it doesn’t look like we’ll get significant relief” from this winter siege until early next week. Other than coping with the cold and high prices, he found to be a fairly quiet market.
The volume of remaining Gulf of Mexico shut-ins related to the passage of Hurricane Ivan last September had dwindled to 558.69 MMcf/d as of Tuesday, or 27 MMcf/d less than what was reported Jan. 3, Minerals Management Service said. Cumulative deferred production since Sept. 11, 2004 reached 159.22 Bcf, or 3.578/5 of normal Gulf output annually, MMS said. Its next shut-in report is scheduled for Jan. 31.
Lehman Brothers analyst Thomas Driscoll weighed in with a storage withdrawal estimate of 105 Bcf to be reported for the week ended Jan. 14.
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