Apparently Wednesday’s Iroquois Zone 2 quote of $76 will stand for a while as the spot market’s price record, because Northeast quotes tumbled Thursday about as fast as they had skyrocketed the day before. Conversely, the rest of the market ranged from flat to up nearly half a dollar after having been softer the day before.

In pushing delivered prices hugely lower, Northeast traders almost certainly were looking beyond the expected continuation Friday of Siberia-like winter weather to predictions of a weekend letup, one source said. He also suggested there may have been some feeling that quotes in excess of $50 were a little overwrought.

Northeast citygate numbers again were tremendously volatile, and as on Wednesday their movement was being measured in quadruple digits — except that this time it was downward. Another factor in the big declines was the regional gas delivery system’s ability to face up to a severe test with no apparent problems (see related story).

Despite their massive market-area demand, the long-haul pipelines from the Gulf Coast to the Northeast (Tennessee, Transco and Texas Eastern/Algonquin) told NGI they did not expect to establish any throughput records during the current siege of polar cold. The chief reason, they said, is that nearly all of the load is at the downstream end, with relatively moderate mid-winter weather keeping dropoff deliveries light along the rest of their systems.

Although it was big enough to reduce the year-on-year surplus, the Energy Information Administration’s report of a 153 Bcf storage withdrawal last week was considered bearish, sending the screen into a steep dive. It was a large volume, a couple of sources agreed, but rather disappointingly low considering the report covered a period of high weather-related gas demand.

The non-Northeast rally is likely to be short-lived. The polar cold front spread a bit further into the Midwest, Mid-Atlantic and northernmost reaches of the South Thursday, but was expected to stall without invading any new territory. Major weakness throughout the energy futures complex, lower demand associated with a holiday weekend and approaching weather moderation in the Northeast virtually guarantee cash market softening Friday.

“It was an adventure coming in to work today” after about 5 inches of overnight snow, one Northeast trader said. Thursday afternoon temperatures had risen to around 15 degrees, but zero was expected overnight, he added. “Plus there is lots of wind too, enough to drop the [effective] temperatures down to minus 10-15 degrees with the wind chill. It’s going to be a good night to be huddled with the family.”

However, this weekend will be “a nice, balmy 28 degrees,” the trader continued, and as a result Northeast prices came off in a big way. His company saw a huge range again at the New York citygate, recording some sales at $55 dollars but hitting a low around $9. He noted that Friday’s trading would be for four-day flows due to the Martin Luther King Day holiday, and weekend prices were looking extremely weak. He reported seeing Henry Hub trade at $5.38 for Jan. 17-20, which was more than 60 cents below Thursday’s Hub WACOG in the low $6.00s.

A Midwestern marketer said area temperatures would remain below freezing into the weekend, but she was hoping for some significantly lower prices Friday because of the unexpectedly low pull in the storage report and the subsequent dive at Nymex.

Meanwhile, a couple of sources in Florida had no deals to report, saying daytime highs on either side of 70 left almost no load at all. “I’m glad to be able to sit back for a while and let the rest of the market go by,” a utility buyer said. A marketer noted that the Florida market was likely to remain soft for quite a while “because it looks like all that cold weather is going to stay well north of us.”

©Copyright 2004 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.