Prices fell again at most points Wednesday, although there was a bit more cash market strength than on Tuesday. This time there were a little more than half a dozen points that were flat to about 20 cents higher.
The continuing diminution of heating load (with little replacement by cooling load yet) and the previous day’s drop of 17 cents by May futures were responsible for cash losses ranging from a little less than a nickel to nearly 60 cents.
One source suggested that widespread expectations of a bearish addition to storage being reported Thursday may have further depressed cash quotes.
The Northeast market apparently has no problem with an outage of supplies from the Sable Offshore Energy Project via Maritimes & Northeast (see related story) as it recorded the biggest price declines for a second straight day. In fact, the largest decrease by far occurred at Dracut, where Maritimes & Northeast delivers into Algonquin. A large majority of regional lows are staying well above freezing, and are being accompanied by moderate highs in the 50s.
Northern parts of Arkansas, Tennessee and North Carolina will be somewhat cool Thursday as peak temperatures reach only the 60s, according to The Weather Channel (TWC). The rest of the South will continue to see moderate springtime conditions in the 70s and occasionally the 80s. Those 80s highs undoubtedly will spur the running of some air conditioners, but it’s unlikely that will be enough to spur the dispatch of gas-fired peaking generation units.
The Rockies, northern Alberta and parts of Eastern Canada such as the Toronto area are among the few areas where lows around freezing or a little less were still in the forecast. Even Calgary is expected to bottom out in the relatively mild (for it) upper 30s. A storm moving out of the Rockies will be occupying the Midwest over Thursday and Friday, TWC said. The storm likely will bring a little wet snow and a few freezing lows to the Upper Plains, the forecasting service added, but because of the area’s sparse population the addition of heating load will be negligible.
A marketer in the Upper Midwest said local weather was fairly moderate Wednesday, but there was still some cold in the 10- to 14-day forecast. “Winter just doesn’t seem to want to give up,” she said. Prices fell about a dime at Michigan citygates, she reported.
The National Weather Service looks for above-normal temperatures during the April 13-17 workweek in a northern area ranging from northwestern North Dakota through most of the Midwest, dipping as far south as central Indiana and southern Ohio, before sweeping through most of the Northeast (coastal sections of the Northeast and southeastern Pennsylvania are expected to see normal conditions). Above-normal readings are also predicted in the Southeast south of a line arcing from southeastern Louisiana to the southern end of South Carolina. Nearly all of the West, from West Texas and central Oklahoma northwestward into Idaho and Washington state, including the entire West Coast and desert Southwest and most of the Rockies, can expect below-normal readings, NWS said.
Tim Evans of Citi Futures Perspective said he expects a “bearish” 18 Bcf injection into storage to be reported for the week ending April 3, to be followed by builds of 13 Bcf and 45 Bcf for the weeks ending April 10 and April 17, respectively. SunTrust Robinson Humphrey analyst Cameron Horwitz is looking for a slightly smaller injection of 15 Bcf in the week ending April 3.
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