Although Northeast delivery prices continued to sink by fairly large amounts Wednesday, gains in the rest of the market were getting larger again as a new blast of arctic cold is anticipated in many areas before the weekend.
A large majority of points were flat to a little more than $1.70 higher. The Florida citygate — where an Overage Alert Day with an unusually stringent imbalance tolerance by Florida Gas Transmission was extended into its third day — led the upticks. Its spike was matched by OGT as low-teens temperatures forecast for Thursday in Oklahoma City helped keep a lot of gas at home instead of heading for the Midwest market area.
Losses were as much as 96 cents; all of the largest ones occurred in the Northeast. Despite a big drop, Transco Zone 6-New York still averaged about $11, and three other Northeast citygates saw averages of about $10 or more.
The previous day’s fall of 24.7 cents by February futures apparently had little effect on most of the cash market; there will be plentiful support for cash Thursday after the prompt-month contract rebounded by 37.2 cents Wednesday (see related story).
The Weather Channel’s (TWC) “Next arctic blast blows even colder” headline on its website’s Wednesday afternoon forecast pretty well summed up the market’s primary driver of higher prices. Few areas will avoid lows ranging from sub-zero to the 20s Thursday. Frigid conditions will reach into the South, TWC said, with a cold front producing light snow beginning overnight in northern Arkansas and spreading to northern Mississippi and Tennessee by early Thursday morning.
Although the Northeast is currently getting a small break from the harsh cold that had bedeviled the region into early this week, severe weather is about to make a return visit. Colder air will flood into the region after Thursday’s highs peak in the 20s and 30s, TWC said. “By Friday, expect 10s and 20s across western New York, western Pennsylvania, West Virginia and New England. Highs will top out in the low 30s from near New York City southward to the eastern Mid-Atlantic,” the forecasting service said.
Some mild warming is expected for next week, but the near-term outlook remains generally frigid for nearly all of North America, with the southern West Coast and desert Southwest continuing to be the last remaining bastion of relatively moderate temperatures.
Tennessee ended one Critical Day OFO but said a new one will take effect Friday in its upstream zones (see Transportation Notes).
A Midwest marketer said her area was experiencing a lot less snow than a lot of parts of the region, “and I’m comfortable with that.” Also, local snow levels are much less than last year at this time, she said.
But with high temperatures only reaching the 20s, heating load from customers is keeping her busy buying spot gas each day, the marketer continued. There is some prospect for a little moderation of the weather next week, however, she said. Currently there are no transportation constraints on the Michigan utilities, she added.
SunTrust Robinson Humphrey analyst Cameron Horwitz projected a 145 Bcf withdrawal from storage for the week ending Jan. 1. Heating degree days that were 8% higher than in the previous week were partly offset by lower holiday-related commercial demand, Horwitz said.
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