Prices were close to a complete turnaround Wednesday from the declines at nearly all points that had begun the week’s trading. Only three Gulf Coast drops of a couple of pennies were left out of flat or higher numbers elsewhere.
Tennessee Zone 0 South in South Texas, Tennessee Zone 0 North in East Texas and Mississippi River Transmission were — just barely — Wednesday’s softer locations. All other points were flat to nearly 45 cents higher. Most gains were less than a dime, but the largest ones in double digits were almost solidly clustered in the Northeast, where a cooling trend would take many cities to lows just above freezing Thursday.
The cash market has gradually strengthened this week based largely on pockets of heating load because it certainly isn’t getting any futures support. The prompt-month Nymex contract fell another 6.0 cents, marking its fourth straight day of decline (see related story).
Physical price firmness also is defying the bearish factors of no significant Atlantic tropical activity since prior to the weekend, along with analysts anticipating another sizeable storage injection for the first full week of the traditional withdrawal season.
No market impact was expected as a result of a Tennessee pipe rupture Wednesday morning in southeastern Ohio (see related story). Based on existing nomination levels, Tennessee said it did not anticipate any service restrictions being necessary.
A Midcontinent producer said his area was experiencing lows close to freezing for now, but a warming trend was just around the corner. He was surprised by the cash market’s mild strength because of a lack of storage injection options, noting that intrastate OGT has virtually no storage capacity left available.
However, with December futures trading a little more than 20 cents above NGPL-Midcontinent and Henry Hub, the producer saw an arbitrage opportunity for any trader who still has storage space open. They can make a tidy profit by buying physical gas now and storing it for one month while selling a futures contract for December, he said.
Temperatures are about normal for now, said a western utility buyer. They will get colder this weekend, he added, but nothing close to what might challenge system throughput. Of course, from a business standpoint it would be good to have weather cold enough to challenge the system because the utility would be more profitable then, he said.
A Midwest marketer reported picking up a small MichCon delivery at $3.52 Wednesday.
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