Locations

The cash market Tuesday looked quite similar to the one a day earlier: prices again softening at most locations in the East and at some in the West, but with many in the Midcontinent and Rockies continuing to recover from the bargain basement levels to which they had descended for the weekend.

Prices continued to drop Monday in most of the East and at some locations in the Midcontinent and Midwest as moderate weather in most areas, ample storage supplies and screen weakness on the prior trading day again weighed on the cash market. Flat to a little more than $1.25 higher numbers at several points, primarily in the Midcontinent and Rockies, were able to benefit from the post-weekend return of industrial load and to some extent from bargain hunting after dropping to less than $2 in some instances Friday.

Mixed price movement returned to the market Monday — barely — following Friday’s all-points losses. But only a few locations managed to be flat to as much as about 19 cents higher as softness continued to dominate cash quotes. The 32.3-cent decline by September futures Friday, coupled with an overall dearth of major cooling load outside the interior West, kept prices falling at a large majority of points.

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.

Upticks by as much as about 70 cents at a few Rockies locations averted a clean sweep of declines in the cash market Friday. All other points recorded losses in bowing to the dearth of heating load in most areas. A dime-plus fall by January futures a day earlier and the usual weekend slump of industrial demand further weakened cash quotes.

Prices at a few scattered locations were flat to slightly lower Tuesday, but most of the cash market recorded gains ranging from a little less than a nickel to a quarter; most were in double digits. The gains were attributed largely to continued demand for storage injections with the traditional injection season still less than two weeks old.

Gulf South said Thursday morning it has verified that six more locations are operational on its offshore Eugene Island Burns System and it would try to confirm nominations at them during the next cycle. The pipeline previously had verified only Eugene Island Block 44 as operational on the system (see Daily GPI, Jan. 20). Force majeure conditions are keeping eight other Burns facilities offline.

Bitter cold pushed natural gas cash prices up more than $1.25 at nearly all market locations on Monday with Northeast points up more than $2 in many cases. New York quotes jumped to more than $16/MMBtu. Despite the cash spike, however, futures staged a late reversal ending the day down more than 27 cents to $13.66 after peaking at $14.45 around 1:20 p.m. EST.

Despite full working gas levels in storage in many locations across the nation and widespread high linepack operational flow orders on many pipelines, gas prices went up on Tuesday between 30 cents and $1, depending on the location, largely in response to the 45-cent increase in futures prices Monday and the huge gap between current cash and futures. Forecasts in some areas also show temperatures slowly returning to more normal levels over the next week.