Pricing

Triple-digit spikes at Northeast citygates stood out amid otherwise mixed pricing Friday that nevertheless had a major bias toward the upside. The extra Northeast strength was hardly surprising, since that region was destined to bear the brunt of a weekend return to widespread, very cold weather.

The initiative proposed by FERC in December to reform pricing policies to promote more natural gas storage development in the United States may help to encourage development of new capacity that otherwise would not be built, but the changes could “chill” financing for new projects, a lawyer who has long represented natural gas and electricity marketers said Thursday.

A few instances of flat to moderately higher pricing showed up in the West, but an overwhelming majority of the cash market continued to probe lower levels Tuesday as traders returned from Christmas holiday. Widespread mild weather and the extension of natural gas futures plunges into their third day Tuesday weighed heavily on cash quotes.

Mixed pricing returned to the cash marketplace Friday, but this time declines were in a lopsided majority. Forecasts of mild to cool weather throughout much of the U.S. and Canada and the typical weekend drop in industrial demand were the chief price depressants.

Mixed pricing returned to the market Wednesday. Western points generally ranged from flat to down nearly 30 cents, although Sumas and intra-Alberta managed small gains. The East had a few declines, mostly in South Texas, the Midcontinent and Northeast, amid overall numbers ranging from flat to a little more than a dime higher.

Quite a few points, mostly in the Midcontinent/Midwest and West regions, were moderately higher Wednesday, but except for a few other gains elsewhere, prices failed to see the price rally that some had expected to be generated by an impending bout of severe winter weather in northern market areas.

The previous day’s strength in energy futures, along with a major winter storm poised to keep much of the West wet and cold throughout the weekend, were credited with making prices a mixed bag Friday, instead of the overall softening that some had expected due to moderating weather in the Midwest and Northeast.

Flat to about 15 cents higher pricing in the West and at some points in the Gulf Coast and Midcontinent/Midwest markets was outweighed Wednesday by declines ranging from a little under a nickel to more than 30 cents. Northeast citygates took the heaviest hits as the eastern U.S. continued to see temperatures rise following a frigid holiday weekend.

With super-cold weather not yet arrived but on the way, Northeast citygates soared Thursday, with some points rising a dollar or more. But otherwise there wasn’t much price strength to be found in trading for the long holiday weekend. Gulf Coast numbers were mixed, and quotes for the Midcontinent/Midwest and West fell uniformly.