Current weather didn’t seem cold enough to justify the substantive gains realized Tuesday at nearly all points as many — but not all — traders returned to their offices from the Christmas holiday weekend. They may have been stocking up a bit in looking forward to the first week of January, when some predict a boost in heating load from the return of cold weather.
Prices also derived some support from the return of industrial demand that was lost over the long weekend.
Texas Eastern M-1 (24-inch diameter line) was the sole point to give up price ground, falling about a nickel. The rest of the market was flat to a little more than $1.35 higher, with three New England points (Algonquin citygate and both Line 200 and Line 300 in Tennessee’s Zone 6) measuring their upticks in triple digits. Most of the other gains were in double digits.
The last time the Algonquin citygate had a higher quote than Tuesday’s $5.75 was on the trade date of July 21, when the point peaked at $9.50.
Wednesday’s cash market will have neutral guidance from Nymex traders, who pushed January futures a scant 0.2 cent lower on the eve of the contract’s expiration (see related story).
Both El Paso and Transwestern keep reporting instances of receipt point underperformance on their respective systems.
The South and West Coast, along with much of the Pacific Northwest, can expect to remain chilly Wednesday but only rarely get as low as freezing. However, lows in single digits, the teens and 20s will be common throughout most of the rest of the U.S. and Canada.
A Florida trader reported Christmas temperatures reaching as high as 78 in the Sunshine State. Despite the mild weather, he reported buying spot gas for a customer that was running a large gas-fired generation unit. Things are very quiet otherwise, he said, as only he and one other staffer will be in the office until after New Year’s Day.
The trader said his company did all of its January deals around the middle of last week, buying into Florida Gas Zone 3 at basis of plus 6 cents, and into both Florida Gas Zones 1 and 2 at basis of plus 2 cents to flat. He said currently firm capacity is “almost being given away” on Florida Gas Transmission, so the company finds it better to buy and use the capacity itself rather than pay somebody else a premium for using it.
A western buyer concurred that it was a quiet market between the holidays, with few people around at both his company offices and at those of counterparties.
The buyer said bidweek prices were coming off a bit from last week. January trading was pretty light both Friday and Tuesday, he said, adding that the busiest day of bidweek likely will be Wednesday when the futures settlement will be approaching. He reported bidweek prices so far in the high $3.10s into Transwestern-San Juan and the low $3.10s into El Paso’s Blanco pool in the San Juan Basin.
Although most IntercontinentalExchange (ICE) trading of January baseload on Friday’s first official day of bidweek was in fairly small amounts for each point, the Chicago citygate saw a hefty 193,800 MMBtu change hands at an average of $3.32/MMBtu, which is 40 cents less than NGI‘s first-of-month Chicago index for December. The Chicago average was almost imperceptibly lower by about half a cent Tuesday, ICE said.
The Southern California border took a more substantial fall on ICE from an average of nearly $3.49 Friday to about $3.40 Tuesday.
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