In reaction to the arrival of the much-anticipated blast of cold air in the eastern half of the country, natural gas futures rocketed higher Wednesday as early short-covering by funds and commercials triggered waves of buy-stop-loss orders. By virtue of its $5.50 high trade, February notched a new all-time contract top and traded within 3 cents of the 21-month prompt-month high made by the January contract on Dec. 13. It closed at $5.43, up 32.3 cents for the session.
Frigid
Articles from Frigid
Enough Cold Still Around to Hike Prices by Varying Amounts
With much of the U.S. and Canada still frigid from last week and renewed cold having returned to the South and Northeast, there was no surprise when prices rose nearly across the board Monday. There was quite a bit of variation among the amounts of increase, however. The Midcontinent/Midwest, Rockies, California and a few Gulf Coast points measured their gains generally in the vicinity of a dime or slightly more. The rest of the Gulf Coast tended to rise by either side of 20 cents, while Northeast citygates were up 30-55 cents.
Glimmer of Warming Keeps Price Weakness in Effect
The fundamental of having snow and/or frigid temperaturescontinuing to pervade most markets was still around, but cashtraders must have been looking at hints that at least a moderatethaw might begin in several areas today. They again sent priceslower by about a dollar or more Wednesday in most cases.
Salomon Smith Barney Sees ‘Brrr-utal’ Chill
If you think it’s frigid now, next week is going to be “brutal,”according to a short-term weather forecast issued by Salomon SmithBarney yesterday.
Frigid Northeast Soars, Other Points Bland as Ever
Most of Monday’s late-February market resembled the rest of themonth: a little up here, a little down there, and a lot of flatnumbers in between. Once again the exception was in Northeastcitygates, which went as high as the $2.50s in some instances.
Frigid Weather Fails to Avert Overall Price Drops
Producers who may have been tempted to sing a few (paraphrased)bars of “It’s beginning to look a lot like winter” upon seeingTuesday’s weather reports probably stifled the urge after cashprices at most points fell by widely varying amounts. The softnessoccurred despite cold to very cold temperatures pervading almostevery part of Canada and the U.S.
Transportation Note
Reacting to frigid weather spreading into the Southeast, Sonatis implementing an Operational Flow Order Type 3 effective todayfor four groups: Birmingham Group, South Main Zone 2, South MainZone 3 and Brunswick Line. The OFO will be extended Wednesday tothe East of Wrens and Savannah Line groups. Due to compressorproblems, Sonat said, the level of interruptible service in the twoSouth Main zones will be less than normal in limitation periods. Inaddition, an OFO Type 22 notice to become effective Wednesday forseven groups was issued by Sonat affiliate South Georgia NaturalGas.