Natural gas cash points overall vaulted on average by more than a dime Wednesday as the high demand and thinly supplied Northeast registered gains approaching $1.00 or more. Points to the south of New England saw smaller gains, and the Midwest was mixed. At the close of trading December futures had eased 3.9 cents to $3.578 and January had given up 3.4 cents to $3.714. December crude oil plunged $4.27 to $84.44/bbl.

Marketers serving the Northeast pointed out that their major buyers sought out natural gas for power generation as the region shivered from a Nor’easter dubbed Athena. Even at prices that exceeded $9.00 in some cases, the economics justified purchases. “Our power customers were out buying hard [Wednesday]. Everybody’s economics are different but its awfully chilly up there, upper 20s to low 30s and pouring down rain and windy. They are afraid some of these people hit by Sandy are going to get hit again with flooding,” said a Houston-based marketer.

Stout New England power prices helped the power generation equation. IntercontinentalExchange reported that next day power at the New England Power Pool (Nepool) jumped $12.22 to $76.94/MWh and deliveries Thursday to the NYISO (New York Independent System Operator) Zone G Peak gained $4.65 to $62.40/MWh. To the south power prices were more subdued. PJM (Pennsylvania, New Jersey, Maryland) West Hub Real Time Peak Power fell $6.75 to $48.60/MWh.

Several nuclear plants in the New England area are either offline or operating at far less than capacity. According to the NGI NRC Power Reactor Status Report, the 813 MW Fitzpatrick plant northeast of Oswego, NY is at 1% power, the 871 Millstone 2 west of New London, CT is at 0% power, and the 665 MW Entergy Pilgrim 1 facility southeast of Plymouth, MA is down 25%. In addition the 565 Niagra Mohawk Nine Mile Point 1 northeast of Oswego, NY is at 0% output as well as the 480 MW Rochester Gas and Electric Ginna plant northeast of Rochester, NY.

These five plants are only a fraction of the 39 nuclear plants either off-line or producing at less than 100% of full power in the NGI NRC Power Reactor Status Report. The 39 nuclear plants’ generation represents a loss of 25,760 MW out of total U.S. capacity of 100,900 MW generated from 104 facilities.

Forecasters said a major Nor’easter, named Athena by The Weather Channel, should be in play through Thursday. “While a powerful nor’easter lashes the Sandy-ravaged coast, snow will fall over a narrow swath of the Northeast Wednesday into Thursday,” said meteorologist Meghan Evans. “A storm that slid off the East Coast on Tuesday is now a powerful nor’easter spinning off the New Jersey coast. The storm is unleashing high winds and a chilly rain with coastal flooding a serious concern.”

Quotes on Algonquin traded as high as $9.10 before settling at $8.45, up 80 cents and deliveries to Tennessee Zone 6 200 L jumped 87 cents to $8.71. Thursday gas at Iroquois Waddington rose 16 cents to $6.00. Farther south price gains were less. Deliveries into Tetco M-3 added a nickel to $3.83 and next-day gas on Dominion rose 9 cents to $3.65. Deliveries to Transco Zone 6 New York tacked on 6 cents to $4.04.

The higher gas prices may have worked for Northeast power generators, but Great Lakes buyers balked at some of the numbers they were seeing. “We didn’t buy on Consumers because the price wasn’t that great,” said a Michigan marketer. “The price was going to be $3.82 so we declined. We are waiting for the weekend [and warmer temperatures],” he said.

At the Chicago Citygates next-day quotes came in at $3.78, up a penny, and deliveries on Alliance were reported at $3.78, down 2 cents. On Michcon next day deliveries were 2 cents higher at $3.82 and quotes on Consumers were a penny higher at $3.77. Gas at Dawn was quoted at $3.99, down 5 cents.

Although November officially starts the heating season, analysts estimate that storage gas continues to be packed away. Thursday’s report by the Energy Information Administration (EIA) should set yet another record, topping last week’s record tally of 3,908 Bcf. Last year 48 Bcf were injected and the five-year average stands at 36 Bcf. A Reuters poll of 25 market pundits showed an average 27 Bcf with a range of 16 Bcf to 50 Bcf. Tim Evans of Citi Futures Perspective is looking for an increase of 32 Bcf and industry consultant Bentek Energy calculates a gain of 26 Bcf.

Analysts saw Wednesday’s setback as confirming that Tuesday’s rise was not indicative of any long-term advance. “The natural gas market mounted a bit of a price recovery on Tuesday on what looked like some modest bargain hunting or profit taking off the recent decline,” said Tim Evans of Citi Futures Perspective. “The gains may have been supported by a somewhat cooler temperature outlook and stronger cash market quotes for northern locations such as Chicago and New York, although we note the more relevant Henry Hub delivery point for Nymex futures was still changing hands at a 20-30 cent discount to December futures.”

New figures from the EIA on power sector demand have Evans thinking incremental supplies might be freed up. “Looking forward, we expect the growth in power sector consumption to taper off, especially in comparison with strong 2012 use, with a shift back to coal consumption helping make room for some additional heating demand.”

Could Chicago’s weather be a sign of things to come?

“There have been 35 November elections in Chicago since 1872 and only three have been as chilly as Tuesday. Just two have been colder. Tuesday’s 42-degree high made it the chilliest November election here since 1992 when the high was also 42,” said Chicago Weather Center meteorologist Tom Skilling. “Wednesday’s predicted 47-degree high will make it the 13th consecutive day of below normal temperatures. A string of sub-normal daytime readings as long as this one hasn’t occurred for more than three years.

“November’s running 8 degrees behind a year ago; November continues a trend of below-normal meteorological autumn temperatures, which started with September’s arrival. Each autumn month this season has posted temperature deficits. At 40.8 degrees, the opening five days of November 2012 are running 5.4 degrees below normal and a whopping 8 degrees behind a year ago.”

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