Once again a few flat to modestly higher points were greatly outweighed in the cash market Tuesday by falling prices as last week’s flashback to winter continued to yield to seasonable temperatures in more areas. Cash quotes also had negative guidance from Monday’s drop of more than a quarter by May futures.
Unlike on Monday, when the market’s showing of light firmness was limited to the Northeast, the points that were flat to as much as about a nickel higher were scattered (but all in the East). The losses, ranging from a couple of pennies to about 40 cents, tended to be largest on Dominion in Appalachia and in the Rockies/San Juan market and smallest in the Midcontinent/Midwest.
A rally appears unlikely anytime soon as more moderate weather is due to continue dominating the fundamentals outlook and the screen fell another 11.2 cents Tuesday.
That doesn’t mean heating load has disappeared, though, with lows in the 30s still in the Wednesday forecast in the Midwest, Northeast and mountainous sections of the West. But in general it is substantially less than it was through late last week.
A Nor’easter storm definitely outstayed its welcome on the East Coast but finally was slinking out to sea Tuesday, The Weather Channel reported.
Southern California Gas waited until early afternoon to send an e-mail notice declaring a high-linepack OFO on the Evening Cycle for Wednesday. Shippers who delivered more than 110% of scheduled volumes into the utility’s system will be subject to buy-back charges. The Southern California border fell about a quarter.
The extra softness in the Rockies occurred despite Questar being scheduled to reopen its Clay Basin storage facility to injections Wednesday (a day earlier than originally scheduled), giving area suppliers an extra outlet for their supplies that had been missing since late March.
“It’s quiet as a mouse,” said the gas buyer for a Southwestern utility. Not only did his company have virtually no heating load at this point, but the region wasn’t getting hot enough to get air conditioning load going to any appreciable extent, he said. “Maybe by early May” power generation demand will be high enough to make a difference, he estimated.
The buyer said his company is in good shape for El Paso transport capacity this summer, actually having more than it really needs. Of course, that’s so for most utilities in the region, he thinks, because there’s no storage available. El Paso’s Washington Ranch facility is too small to be much use to anyone except the pipeline, which completely controls injection/withdrawal nominations there, the buyer went on. El Paso tried to sell Washington Ranch storage accounts many years ago, he said, but essentially no one responded.
A utility buyer in the South said it’s warming up in his area, but the recent spate of cold had greatly slowed his company’s storage injections. “We wanted to hit it [storage] as hard as possible” due to April’s being “the cheapest month” (referring to the Nymex futures strip), but have needed spot gas more for current burns. Even with warmer weather returning, though, TGT customers are limited on how much they can inject due to the pipeline beginning an integrity test on a Kentucky storage field that will last about 10 days, he said.
Ron Denhardt of Strategic Energy & Economic Research is looking for a pull of 27 Bcf to be reported for the week ending April 13.
©Copyright 2007Intelligence 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.
© 2020 Natural Gas Intelligence. All rights reserved.
ISSN © 1532-1231 | ISSN © 2577-9877 |