A large majority of points rose Thursday in response to harsh winter weather either already in place or about to return. But despite a cold front moving through Friday, the Northeast forecast wasn’t cold enough to prevent losses of up to about 45 cents at regional citygates. New York City deliveries fell about 35 cents as the Big Apple is slated to have temperatures peak around a quite unseasonable 50 degrees Friday (but the low will be sub-freezing).
Outside the Northeast the market presented a solid front of increasing numbers. Gains ranged from a little less than C5 cents (Westcoast Station 2) to a little more than a quarter (OGT).
Lows in single digits or less than zero are due Friday in much of the Midwest, with snow showers lingering around the Great Lakes. The western end of the Northeast will see cold similar to that in the Midwest, but temperatures toward the coast will be considerably milder.
In the South there will be substantive chill at the western end in Oklahoma and Texas, but fairly moderate conditions will dominate the rest of the region. Atlanta and New Orleans temperatures are due to peak Friday in the low 60s and low 70s, respectively.
A windy West will largely see little change from the status quo: fairly heavy snow and cold temperatures in the interior mountain regions and relatively moderate seasonal conditions in most other sections. A cold front will have temperatures dropping in the Pacific Northwest entering the weekend.
The Energy Information Administration’s estimate of a 120 Bcf storage withdrawal during the week ending Feb. 8 modestly exceeded consensus expectations in the mid 110s Bcf. Nymex traders focused mostly on intermediate-term forecasts trending colder and a super-strong petroleum futures complex in sending March natural gas futures up 38.4 cents on the day.
Reflecting how rapid temperature fluctuations in the central U.S. have been recently, just a day after ending a System Protection Warning Thursday MRT said it was initiating a new one Friday (see Transportation Notes). Northern Natural Gas had acted similarly earlier in the week — lifting a System Overrun Limitation (SOL) for all market-area zones Wednesday and then calling another one Thursday. Northern will keep the SOL in place at least through Friday as it currently is having to allocate storage withdrawals on its system.
A Midwest utility buyer looks for prices to keep rising Friday, but not by much because of both the Presidents Day holiday weekend and some moderation of cold in his area during the weekend. However, it will turn “very cold again” Monday, he said, which will create some problems in scheduling gas because of the daily variations in expected load.
Noting that his city’s low Friday will be around zero, the buyer said it’s been “a pretty cruel winter here so far; it’s about time for spring.” And predictions made in December and January of a generally mild February have proved baseless for the most part, he said. (NGI can confirm that; as of Thursday only Northeast citygates and Sumas were trading at deficits to first-of-month indexes, and the premiums to index elsewhere were in double digits at all but one point.)
The buyer said he had thought about investigating the possibility of moving some Rockies gas to his utility via Rockies Express (REX) into Northern Natural, but that interconnect is at capacity most of the time. So now it looks more doable to move REX gas over to ANR, where capacity is available, he said.
Based on Thursday’s futures strength and the cold weather that will last into the weekend, a Midcontinent producer also said he sees a good chance of prices continuing to rise Friday. But he agreed with the utility buyer that the extra loss of industrial load that accompanies a holiday weekend is likely to limit Friday gains and maybe allow some declines. Noting that OGT averaged well above most other Midcontinent locations Thursday, the producer said not many people have been actively trading the intrastate pipe lately, and the lack of liquidity has tended to boost prices in deals that do get done into OGT.
©Copyright 2008Intelligence Press Inc. All rights reserved. The preceding news reportmay not be republished or redistributed, in whole or in part, in anyform, without prior written consent of Intelligence Press, Inc.
© 2020 Natural Gas Intelligence. All rights reserved.
ISSN © 1532-1231 | ISSN © 2577-9877 |