Colder

Saying it had limited operational flexibility to manage imbalances and due to expected colder temperatures in its Northeast market area, Tennessee issued an Imbalance Warning in Zones 5 and 6 to take effect Monday. See the bulletin board for details on Imbalance Warning conditions. Tennessee also said Thursday it was lifting a force majeure on Line 527A-800 due to the sale of a damaged line section. “However, physical flow at…West Delta Block 109 will remain shut in until the purchasing party repairs the line” to Tennessee specifications, the pipeline said.

Colder weekend temperatures whose forecast appeared to lift prices earlier in the week were actually beginning to arrive Friday, but prices continued to drop across the board by fairly large amounts. A prior-day futures drop of 11.9 cents and record-high storage levels appeared to be the major depressants on the cash market. Of course, the usual weekend decline of industrial demand was another minor bearish factor.

With some support from the previous Friday’s futures advance, the cash market was finding enough increases in colder weather either already in place or imminent to realize gains at a sizeable majority of locations the board Monday.

The brief midweek firming effect on gas prices from colder weather began to fade a bit Thursday as modest warming trends were in effect in such areas as the South, Northeast and Midwest. They weren’t substantial enough to generate much in the way of cooling load, but they caused the market to be mixed on small price changes both up and down from flat.

A La Nina event — an unusual cooling of ocean surface temperatures off the western coast of South America — will help produce relatively warm temperatures through November and, despite a slow start to the 2010 Atlantic hurricane season, will be one of the drivers behind the creation of an unusually large batch of tropical storms this year, according to Andover, MA-based WSI Corp.

Bullish prior-day screen teams with colder temps to keep upward pressure on market.

The cash market wavered on either side of flat Tuesday, seemingly torn between forecasts of colder temperatures in such key market areas as the Midwest and South versus the previous day’s prompt-month futures break below $5 for the first time since December combined with ample storage inventories remaining as the final month of the traditional withdrawal season nears.

The cash market wavered on either side of flat Tuesday, seemingly torn between forecasts of colder temperatures in such key market areas as the Midwest and South versus the previous day’s prompt-month futures break below $5 for the first time since December combined with ample storage inventories remaining as the final month of the traditional withdrawal season nears.

The winter weather machine was starting to rev up its engines again, with forecasts of lows around freezing or colder extending into most of the South, and the spot market responded with small to moderate increases at a large majority of points Tuesday. The return of industrial load from its greater-than-usual declines over a holiday weekend and Friday’s 7.2-cent uptick by March futures also played supportive roles.