Prices soared Monday at all points in the East and most of them in the West as much of the U.S. braced for the first major cold snap of the fall season. However, excess gas supplies and limited options on placing them in the market resulted in large retreats in the Rockies.

Double-digit gains from nearly half a dollar to around 85 cents dominated eastern markets and the non-Rockies West. But Rockies points plummeted by as much as 90 cents or so. The lack of storage injection capacity at Northwest’s Jackson Prairie facility and limited injection capability at Questar’s Clay Basin facility combined with high linepack throughout the Kern River system and a PG&E high-inventory OFO (see Transportation Notes) depressed the Rockies market, which was averaging less than $3 Monday after having finished last week solidly above $3.

Despite the utility’s OFO, the PG&E citygate managed to participate in the overall price surge with a gain of more than 65 cents.

In the East, the supply situation generally was quite different for one pipeline from the one that plagued Rockies prices. Southern Natural Gas said its shippers had managed to accumulate more than 450,000 dekatherms of short imbalances in just the first week of October alone (see Transportation Notes). But another eastern pipe, Dominion, reminded customers Monday of an OFO that it implemented last month (see Daily GPI, Sept. 20) requiring them to conform takes from Dominion to scheduled nominations of receipt gas. Citing current inventory levels, Dominion said it cannot tolerate any due-shipper imbalances, including unauthorized storage overinjections. Immediate action is needed to remove any existing due-shipper imbalances and also prevent creating any new ones, the pipeline said.

Most of the physical market realized big increases based on an approaching invasion of polar air from Canada that would first affect the Upper Plains states Tuesday afternoon before spreading into the Midwest at midweek and subsequently into the Northeast and South. Heating load will remain fairly brisk into the weekend, but by early next week most of the below normal temperatures will have retreated back into the Midwest and the relatively sparsely populated Upper Plains and northern Rockies regions, according to the six-to-10-day forecast posted Monday by the National Weather Service.

Snowfalls are expected after midweek in parts of the Upper Midwest.

Prices also received support from the screen’s 12.9-cent uptick on Friday and the return of industrial load after its typical weekend hiatus. However, futures guidance for Tuesday’s cash numbers turned essentially neutral Monday when the November contract barely eked out a 0.2-cent closing gain after having seen stronger pricing for much of the day.

This was primarily a weather-driven market spike, a Texas-based marketer said. Utilities in northern market areas are stocking up now in anticipation of the colder temperatures at midweek, he added. But with not much storage injection capacity remaining, they’re probably parking as much gas as possible in the linepack of their own systems and those of the interstate pipes, he said.

The utilities have to hope they made the right choice by buying Monday in a sharply rising market to avoid presumably higher prices in the next couple of days, the marketer continued. This could backfire on them if less heating load develops than expected, he said.

A bearish consequence of the impending switch to considerably colder weather will be the elimination of a good portion of the cooling load that still remains in the South. For example, the Houston forecast called for highs remaining in the mid to upper 80s through Wednesday, but not getting above 73 degrees Thursday and Friday.

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