Firming

With energy demand high and producers climbing over each other in the Marcellus Shale region, the Northeast remains “ripe with bottlenecks,” and it’s likely to get more congested before natural gas infrastructure is completed, Williams CEO Alan Armstrong said Wednesday.

The physical and futures markets elected to part company Thursday with a majority of the cash market firming and futures heading south. While most cash points upticked by less than a dime for a second straight day, more than a handful of Northeast averages once again dropped by between 20 cents to nearly a half dollar.

Prices rose again at nearly all points Thursday, but it seemed increasingly likely that the current week will not run the table with firming numbers. Several flat to a couple of cents lower locations broke the preceding string of flat to higher quotes across the board; except in the Northeast, Thursday’s gains were considerably smaller than those preceding them; and — again except in the Northeast — modest warming trends were returning several areas to fall-like conditions after a temporary touch of winter.

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.

It appears the natural gas bulls aren’t even allowed to hold on to a shred of price rebound hope as the recent signs of a firming crude futures market were proved incorrect Tuesday by a more than $4/bbl drop. Faced with the economic recession, plenty of gas and a forecasted warm-up in temperatures, February natural gas futures traded a slim 12.8-cent range before closing at $4.503, up 1.3 cents from Monday’s finish.

Spikes at Northeast citygates Tuesday didn’t get much company elsewhere in the firming category. Most points declined as moderating weather trends in the western half of the South, Midcontinent and Midwest limited overall heating load. The previous Friday’s 4.2-cent drop by February futures was another mildly negative factor for the cash market.

Flat to about 20 cents lower at five Northeast market locations and NOVA Inventory Transfer (NIT) constituted the only exceptions to a firming cash market Tuesday. Cash prices had a supportive prior-day increase of 11.2 cents by February futures, but the chief reason for Tuesday’s gains at all other points was what the Weather 2000 consulting firm called the “most frigid arctic air yet of [the] season” currently pouring into the central U.S. from Canada.

Moderate softness at some points in the Midwest and West was mixed into an overall market Wednesday that was flat to a little more than a dime higher. Rainstorms in much of the East were helping to dampen hotter weather that had been increasing power generation load earlier in the week, and cooler temperatures were moving southward into the Rockies, relieving some of the cooling load in that region as well.

For the second day in a row El Paso’s San Juan-Blanco pool was the odd point out Wednesday amid a continued firmness in prices overall. At other locations quotes rose between a nickel (CIG) and about 20 cents.