Cash prices fell 7 cents on average Thursday as traders ignored a powerful East Coast storm and concentrated on getting deals done before the release of government inventory data.
A handful of points managed gains, but most had losses. The Energy Information Administration (EIA) reported a withdrawal of 146 Bcf, which was more than what traders were expecting, and futures shot higher following the release of the data. At the close, April futures had risen 11.2 cents to $3.582 and May had gained 10.8 cents to $3.627. April crude oil added $1.13 to $91.56/bbl.
Great Lakes marketers were doing little buying and were looking ahead to anticipated milder weather. “Given the weather report we just got, it looks like things could be warming up. We only bought 900 Dth on Consumers for Friday, and we have a lot of time left in the month to get balanced.
“It looks like our March usages are matching up with February and the number of days usage-wise will be the same, so we have a good idea of what to expect at the end of the month. If March warms up, however, that will all change,” a Michigan marketer said.
The Chicago Weather Center is looking for a warmup Friday, but cooler temperatures for next week. It said the high Thursday of 36 was expected to rise to 42 Friday but fall to 35 by Monday.
“Some haze is likely as melting occurs in the above-freezing afternoon temperatures. Temperatures approach more seasonable levels except near Lake Michigan where the day’s light southeast winds 5 to 12 mph come off the ice flows and chilly lake winds. Shoreline readings may hold to the 30s,” said Tom Skilling, a Weather Center meteorologist.
Quotes at Chicago Citygate fell 11 cents to $3.67, and next-day gas on Alliance fell 11 cents to $3.66. On Michcon, next-day gas was seen at $3.68, 6 cents lower, and on Consumers Friday deliveries came in at $3.68 as well, 8 cents lower. At Dawn, Friday gas was quoted at $3.86, 2 cents lower.
Longer-term weather forecasts are somewhat unstable. Commodity Weather Group in its morning 11- to 15-day outlook showed below-normal temperatures limited to Idaho, Montana and the Dakotas, and above-normal temperatures in Texas and the Desert Southwest. “The extended range view is more muddled as the American operational [model] goes for a much warmer pattern in the Midwest, East and South (very chilly West) and the American/European ensembles show a more variable pattern with generally weaker anomalies,” said Matt Rogers, president of the firm.
“We favor that variability as we still see conflicting pattern influencers, including the North Atlantic blocking feature and an unstable Pacific situation. This offers a net warmer 11-15 day view, but still many areas average the period closer to the 30-year normal again.”
In the near term, the East and Northeast will have to endure stormy conditions. “A storm hovering offshore will continue to throw, wind, rain, wet snow and coastal problems at areas from New Jersey to New England,” said Alex Sosnowski, an AccuWeather.com meteorologist.
“The storm, which has gone through multiple strengthening and weakening phases, causing the precipitation area to wobble around will strengthen one last time into Friday morning as a disturbance is drawn in from the west. Marginal temperatures will also play a role in causing part of the storm to be rain and some of the snow that falls to melt on roads for a time.
“The storm will track northeastward enough and pause long enough before turning out to sea to throw precipitation farther north. This track favors substantial snow accumulation from Hartford, CT; Boston, Providence, RI; Portsmouth, NH; Portland, ME; Albany, NY; and close to Burlington, VT.”
Prices in the East and Northeast were typically volatile. Quotes on deliveries to Algonquin Citygate Friday fell by 30 cents to $7.48, and gas into Iroquois Waddington slid 27 cents to $5.19. On Tennessee Zone 6 200 L Friday deliveries fell 11 cents to $7.44.
In spite of anticipated cold and stormy weather, eastern points eased. On Tetco M-3 deliveries for Friday fell 22 cents to $3.79, and gas on Dominion shed 9 cents to $3.58. Deliveries into New York City on Transco Zone 6 dropped 72 cents to $3.94.
Other market areas were mostly weak. Gas at the Henry Hub fell 3 cents to $3.54, and deliveries to NGPL Midcontinent Pool were off 4 cents to $3.46. At Opal, next-day gas slumped 2 cents to $3.50, and at PG&E Citygate, Friday packages were up a cent at $3.84.
In overnight trading the futures market consolidated on light volume as traders squared positions, or programmed their computers, to respond to the 10:30 a.m. EST release of EIA inventory data. Short-term traders suggested that the only reason the April contract has been able to stay in sight of $3.50 resistance is the ongoing bout of stormy, wintry weather pounding the Midwest and Mid-Atlantic. Analysts point out that prices have skidded a stout 13 cents down to the 100-day moving average at $3.465 after reaching a five-week high as recently as Monday.
Most storage estimates gravitated to the 130-ish Bcf area, with not much deviation between estimators.
“This week, we’re not feelin’ it. We’re not seeing a surprise in the cards this week,” said John Sodergreen, editor of Energy Metro Desk. “The range is fairly tight. The standard deviation is relatively low-ish (4.3). Last week had some crazy shifts in weather, but nothing new for this year. The range between the three categories we track [private forecasters, banks and polls] was exactly 1 Bcf — the tightest we’ve seen all season.
“Our Metro Desk consensus came in a little lower than the rest of the back at minus 131 Bcf, and the editor was even lower at minus 126 Bcf. Risk is to the downside of the consensus, we think, but not by much.”
Last year at this time, a thin 92 Bcf was withdrawn, and the five-year average stands at 107 Bcf . United-ICAP forecast a pull of 130 Bcf, and both Bentek Energy and a Reuters survey of 25 analysts estimated a 134 Bcf withdrawal.
The Producing region salt cavern storage figure dropped by 18 Bcf from the previous week to 190 Bcf, while the non-salt cavern figure declined by 40 Bcf to 627 Bcf. The EIA first split Producing Region facility types in storage report footnotes in March 2012 in an effort to give analysts and industry more comprehensive information on the relationship between natural gas inventory changes and types of storage facilities (see Daily GPI, March 26, 2012).
Â©Copyright 2013Intelligence 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.
© 2021 Natural Gas Intelligence. All rights reserved.
ISSN © 1532-1231 | ISSN © 2577-9877 |