With forecasts cropping up of weather more appropriate for January than the mild conditions that have dominated much of the East so far this winter, prices staged a double-digit rally at all points Monday.
Gains ranged from about a quarter to 80 cents or so. The largest ones of half a dollar or more tended to be concentrated in the Gulf Coast and Northeast.
The return of industrial load from its weekend hiatus and the 2.2-cent gain by February futures Friday contributed a bit of extra support to the cash market.
Snow showers will be common Tuesday from New York state southward into the Mid-Atlantic, according to The Weather Channel (TWC). That will mark a quick change for New York City-area residents who reveled in highs around 70 degrees Saturday afternoon. Much of the Midwest is also due to get some snow, and highs in the region’s upper reaches will struggle to get out of the teens.
Conditions will remain more moderate in the western end of the South and the desert Southwest, but the South’s eastern end will get cold enough that the Carolinas may also see snow, and Florida Gas Transmission warned market-area customers of the possibility of an Overage Alert Day because of forecasts for just-above-freezing weather in northern Florida over the next two nights.
The upper West, which has been having a more normal winter than much of the U.S., will be stormy again Tuesday, TWC said.
The approaching cold in the Northeast induced Texas Eastern, Algonquin and Transco to lift bans on scheduling nomination for the resolution of due-pipe imbalances (see Transportation Notes). And in the West, Westcoast revised its imbalance tolerance range to encourage packing of its system while Kern River reported low linepack in its three farthest downstream segments.
A Texas marketer said he guessed that weather forecasts in the first few days of the month, when mild weather was still expected to extend through mid-January in the northern market areas, “were wrong.” However, he pointed out that while market-area temperatures are getting a lot cooler than they had been, it’s just a return to normal January conditions in the Midwest and Northeast and not especially super-cold.
The new burst of cold should help traders who may have been having trouble meeting mandatory storage withdrawals, the marketer said. He expects rising prices to continue not only due to more cold weather in the forecast for later this week, but also because of the nearly 20-cent increase in February futures Monday.
Commenting on the relaxation of imbalance resolution restrictions by Texas Eastern, Algonquin and Transco, the marketer wryly said “it’s been a while” since his company has been able to nominate to reduce due-pipeline imbalances on the pipes into the Northeast.
It was “fairly uneventful” in the NOVA Inventory Transfer market Monday, said a Calgary-based producer. It’s pretty cold already around Calgary with lows in the high teens, he added, but that will feel relatively mild when thermometers are expected to get down to minus 4 degrees F as the weekend approaches. That kind of weather will last four to five days before a warm-up begins, he said.
Referring to the marketer’s comment about northern market areas just returning to “normal,” the producer said, “That’s OK, there’s still more demand.” He noted that it had become profitable to transport gas from the Aeco-C Hub to Malin again.
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