Even with a fairly impressive amount of heating load remaining in play on the first official day of spring, the cash market was mostly softer as mixed pricing extended into a fourth straight trading day Monday.
Scattered upticks ran as large as about 15 cents, but they were heavily outweighed by points ranging from flat to nearly 30 cents lower.
A general rally is unlikely Tuesday. Not only will spot gas have negative guidance from a second 20-cents-plus screen drop Monday, but cold weather will be receding into northern market areas by Wednesday. A plunge of more than $2/bbl Monday by April crude oil futures will add to overall energy price bearishness, and with the end of the traditional storage withdrawal season less than two weeks away, displacement of new production purchases by substituting storage gas for current burns will keep pressure on physical prices.
Scheduled storage withdrawals were back to 5.3 Bcf Monday after having dipped to 4.6 Bcf Saturday and 4.8 Bcf Sunday, according to analysis by Bentek Energy of Golden, CO.
Spring officially began shortly after noon Monday, but it would have been hard to tell from the vestiges of winter that will linger through midweek or maybe longer from Canada through northern and western market areas. Snow is in the forecast Tuesday for much of the Midwest and Northeast and mountainous sections of the West.
The U.S. map was a sea of blue Monday in a presentation by The Weather Channel designating deviations of as much as 20 degrees below seasonal norms. The Midwest, a small portion of the Mid-Atlantic and a coastal strip along the Gulf Coast states were the only significant areas where temperature anomalies were close to flat, and only South Texas was recording positive thermometer levels of five degrees or more above normal.
After a false start late last week (see Daily GPI, March 20), operator Amerada Hess hopes to have the Sea Robin Gas Plant, which serves Sea Robin Pipeline near Henry Hub, processing again around midweek. The plant has been shut down since Hurricane Rita swept ashore last September near the Louisiana-Texas border. Hess had started the ramp-up process around midday last Thursday, a spokesman said, but stormy weather caused the area electric grid to go down. The producer will try to get the boiler “hot” amid other preparations Tuesday for resuming the start-up, he said, with actual processing likely to start Wednesday. Before Rita the plant was processing more than 400 MMcf/d, he added.
A utility buyer in the south-central U.S. said it was about 48 degrees for a Monday afternoon high in his city, which was helpful in cutting down his company’s storage levels. However, it won’t last, he said. Monday night probably would be the area’s coldest of the week, followed by a warming trend in the rest of the week, he said. It would have been tough to make TGT’s revised storage withdrawal ratchets without some help from the weekend cold, he went on. Although his company appreciates the pipeline’s flexibility on required storage levels by April 1, the buyer said he used to be able to get down below mandated levels and then start injecting again, but this year TGT not allowing any new injections until April.
A marketer who was in Alabama on vacation last week said she certainly didn’t relish “coming back home to this cold” in the Upper Midwest. “We definitely have some heating load” with temperatures in the 30s and some wind to take wind chills even lower, she said. The region will stay pretty cold into the weekend, then may get some relief from the cold early next week, she added.
Western Canada’s NIT (NOVA Inventory Transfer) and Westcoast Station 2 went about C15 cents each in opposite directions. The Station 2 gain and NIT loss trimmed their basis spread to about C65 cents Monday, a far cry from the nearly C$1 that separated them Friday.
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