Triple-digit plunges in the Rockies and San Juan Basin were greatly conspicuous among general flatness elsewhere in Wednesday’s trading. Only rarely did non-Rockies/San Juan points stray more than a few pennies up or down from unchanged as most of the nation was expected to continue seeing a mix of belated winter and springlike weather through at least Tuesday.
The areas still experiencing ex post facto winter conditions were unchanged from the previous day: Canadian border-hugging stretches of the Pacific Northwest, the north-central states and the upper Northeast. Otherwise mild temperatures prevailed, with air conditioning load still relatively weak in the South.
The natural gas screen tumbled 6 cents in sympathy with plunges in crude oil and heating oil futures. Encouraged by faster progress in the war against Iraq, indications that Nigeria’s export constraints were easing, and a larger-than-expected build in U.S. inventories, crude lost more than a dollar at Nymex again to end the day barely above $28.50/bbl.
The big dropoffs in San Juan and Rockies numbers had been anticipated since before bidweek, since Transwestern had posted a notice of a total maintenance outage of the San Juan Lateral starting Thursday and lasting five days.
“Yeah, I kind of expected they would be so weak,” said a western marketer recalling a similar outage last year about this time that also was accompanied by a storage facility maintenance restriction. “Besides, there’s a glut of gas around, and little weather load because of mild temperatures in the Rockies.”
The market was a little oversold anyway as traders had already planned around the Transwestern outage, the marketer added. He noted that only about 325 MMcf/d can get into Questar’s Clay Basin storage facility currently, “and Kemmerer [the Northwest bottleneck for northbound supply] is full.” That allows buyers to take advantage of the situation temporarily, he added. “They can put out Rockies bids at $1.50 and eventually the gas would come to them.” However, the marketer expects a sharp pop back up Monday (the day on which the lateral outage ends) based largely on storage injection demand; he said he looks for the Rockies to get back to at least around index levels in the $3.20s or possibly higher.
Northwest Pipeline had this bulletin board commentary on the situation: “Temperatures in the Pacific Northwest are expected to cool throughout the week. Though the volumes through Kemmerer have decreased, continued alignment of markets and supply is necessary. It will be a challenge throughout the week for the Clay Basin facility to handle the Kemmerer shortage and anticipated market changes due to the Transwestern maintenance. Your cooperation in continuing to help keep the pipeline balanced is greatly appreciated.”
As expected, such points as Sumas and El Paso-Permian benefited with gains of about 15 cents Wednesday from the lowered competition from San Juan/Rockies supplies, while California was flat to mildly higher.
“It was a little up, a little down, pretty boring in general,” was the market assessment of a Northeast trader. There was only a little heating load and virtually no cooling load, which generated flat to slightly lower citygate numbers.”
April is starting off with tremendous temperature gradients, according to the Weather 2000 consulting firm. “With New York City seeing some light snow earlier this week, the Great Lakes still being partially frozen, and the upper Midwest experiencing temperatures this week 10-20 degrees below normal (and more snowstorms on the way), you’d have a hard time convincing Northerners that April is upon us. Especially across the northern tier states, HDD [heating degree day] tallies are still coming in fast and furious.
“Meanwhile, if you contrast that to the Southeast, recent mild temperatures would make you think you were on a different continent let alone a mere few states away. These large temperature contrasts (gradients) are the result of some very cold air still draining down from Canada clashing with warmer, more humid Gulf of Mexico air masses. This is, and will be, presenting itself in the form of incredible 20-degree differences from one portion of a state to another! Due to the precarious nature of these frontal boundaries, those states ‘caught in the middle’ could see a temperature forecast waver significantly from just a 20-40-mile shift of the exact boundary conditions…
“A more powerful ‘push’ of the colder air will once again bring below normal temperatures everywhere east of the Mississippi from Canada all the way to the Gulf by next week. Ridging and dry weather will once again re-establish itself across the West/Plains during next week, with cool air damming and tele-connection-induced cool drainage still impacting the eastern third/quarter of the nation.”
©Copyright 2003 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.
© 2020 Natural Gas Intelligence. All rights reserved.
ISSN © 1532-1231 | ISSN © 2577-9877 |