Many points were flat or close to it Thursday in a mixed cash market that leaned mostly to the upside. A majority of the slightly softer quotes were in the West, Midcontinent and Northeast.
Gains ran as high as a little more than 15 cents, while nearly all losses were limited to a little less than 20 cents. With only a few exceptions, prices were either flat or less than a dime higher or lower. (A Florida citygate quote about 45 cents down from Wednesday was a market anomaly; the dive was prompted by Florida Gas Transmission ending an Overage Alert Day for market-area customers.)
Although heating load support for cash pricing is starting to lighten in some areas, much of the U.S. and Canada seems locked more into winter-like weather than the spring season that enters its fifth day Friday. Even the South hasn’t been able to shake the lingering winter syndrome; freeze warnings and watches are posted through Friday morning for most of the region from Oklahoma and Texas through Alabama, according to The Weather Channel (TWC). Although temperatures will be rising towards Friday afternoon, the entire region will stay five to 10 degrees below average through the weekend, even in Florida, TWC said.
Meanwhile, unseasonable cold into the weekend and beyond is still the outlook in the Northeast and Midwest. The southerly sections of the West have moderated tremendously, but stormy and frigid weather will continue in the Pacific Northwest and Rockies.
The volume fell short of consensus expectations in the 30s Bcf when the Energy Information Administration estimated a storage withdrawal of 23 Bcf for the week ending March 17. The Producing region was in injection mode again, stashing way 7 Bcf. A small pull had already been solidly factored into market attitudes, though, so futures traders opted to piggyback the April natural gas contract onto spikes by Nymex’s petroleum-based offerings. May crude oil soared by more than $2 to wind up just 9 cents shy of the $64/bbl level.
The Gulf Coast got a welcome boost in processing capability when the Sea Robin Processing Plant succeeded in resuming operations that had been sidelined by Hurricane Rita last September (see Transportation Notes).
A Northeast marketer expects most, if not all, of the cash market to be softening pretty soon as temperatures start to move ever so slightly higher while the storage situation remains bearish. It could come as early as Friday, he said, but probably not. The screen surge Thursday may be all cash needs to stay firm, especially since it will still be pretty cold in northern market areas, he said. The marketer could only assume that natural gas futures must have been riding the strength of oil markets, since there was little else to move the screen higher. Concurring with other sources, he said the market has been “dead quiet” lately, noting the general lack of volatility in trading Thursday.
A Gulf Coast producer expects prices to be “probably up” Friday, mostly because of Thursday’s Nymex strength. In addition, his company’s in-house futures analyst anticipates further screen gains Friday, he said.
There is not a lot of interest yet in April business, the producer continued, but a lot of people are saying activity will heat up Monday. He said he likes these tidy Monday-Friday bidweek trading periods like the one coming up because they keep him from having to stay later than usual at the office on Friday.
Intrastate pipes were trading higher than the interstates in Oklahoma for some reason, a Midcontinent producer said, but he was not sure why. It’s cold in the state, but not all that cold, and a warming trend is under way, he pointed out. Despite a lot of gas being offered on CenterPoint Thursday, that pipe was the only one in the region making substantive gains, he said.
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