The trading week ended quietly Friday with Northeast citygates continuing to take long strides in retreat from the quadruple-digit heights they had seen early in the week and the rest of the cash market mixed but with bears firmly entrenched in the driver’s seat.
Weak weather fundamentals, negative prior-day futures guidance and the slump of industrial demand that typically accompanies a weekend combined to pressure nearly all points lower.
Chances for a rally anytime soon appear dim. Above-normal temperatures are expected nearly everywhere in the U.S. in the coming week, and one of the rare areas where below-normal conditions are forecast is the southern third of Florida — which isn’t exactly where anyone would expect to see substantial heating load. And the screen made it three-for-three in down days Friday, shedding another 15.6 cents to close at $7.083. Also, mandatory storage account reductions that must be met by March 31 will continue to supplant purchases of new production.
Losses ranged from about a nickel to a little more than $1.15. Not counting the Northeast, declines were capped at around 35 cents and tended to be greatest in the Rockies/San Juan market. Several instances of flat to nearly C10 cents higher were scattered throughout the market.
With the month approaching its halfway point, all points are now trading at double-digit discounts to their first-of-month indexes. The largest deviations from index are concentrated in the West.
Even though SoCalGas ended a high-linepack OFO (see Transportation Notes), western markets were still grappling with excess supply issues. El Paso said its system was “experiencing excessively high linepack going into the weekend. One of the two units at Washington Ranch Storage facility has experienced several trips over the last few hours. Shippers are urged to bring their supplies in balance with their takes. If the situation fails to improve, a declaration of Strained Operating Conditions may be required.” In addition, Kern River cited “significant banking” in reporting high linepack systemwide Friday.
Winter hasn’t totally disappeared, but is rapidly fading into past tense. Western snowfalls over the weekend would be limited to the upper mountain areas, and following record lows Friday morning across New York and New England, temperatures were predicted to rebound so quickly that a weekend front would produce only showery rain across the Northeast, according to The Weather Channel (TWC).
The Plains and Midwest were due to continue slow warming trends and would be “quite mild” through the middle of this week, the forecaster said. Meanwhile, spring appears to have arrived early in the South and much of the West. From Sunday through Tuesday, high temperatures are expected to be a whopping 10-25 degrees above average from Montana to California and Arizona, TWC said.
Citigroup analyst Tim Evans thinks last week’s unexpectedly cold weather gave an extra boost to storage withdrawals. He predicts that a 125 Bcf pull will be reported for the week ending March 9.
The number of drilling rigs actively searching for gas in the U.S. increased by seven to 1,465 in the week ending March 9, according to the Baker Hughes Rotary Rig Count (https://intelligencepress.com/features/bakerhughes/). That was down 1% from a month earlier but 13% higher than the year-ago tally, Baker Hughes said. Gas-seeking rigs in the Gulf of Mexico fell by two to 85.
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