Teens

Friday lows in the teens and 20s stretching from the Rockies and Western Canada through the Midcontinent/Midwest into the Mid-Atlantic, Northeast and Eastern Canada were insufficient to prevent spot prices from continuing to fall at nearly all points Thursday, although the declines were smaller than those of the day before in most cases.

It would seem that a day with forecast lows in single digits and the teens in many parts of Western Canada and the northern half of the U.S., accompanied by mercury levels due to bottom out around freezing in northerly reaches of the South, should be sufficient to cause rising spot gas prices. But it wasn’t so Wednesday.

Low temperatures sinking into the teens, single digits and even below zero Thursday in areas from the Northeast through the Midcontinent/Midwest, Upper Plains, Canada and parts of the Rockies failed to faze either the cash or futures markets Wednesday. Softness remained the order of the day. Physical prices fell at all but three points as conditions were due to stay relatively moderate across the southern tier of states and in much of the western U.S. outside the Rockies.

Low temperatures sinking into the teens, single digits and even below zero Thursday in areas from the Northeast through the Midcontinent/Midwest, Upper Plains, Canada and parts of the Rockies failed to faze either the cash or futures markets Wednesday. Softness remained the order of the day. Physical prices fell at all but three points as conditions were due to stay relatively moderate across the southern tier of states and in much of the western U.S. outside the Rockies.

Cash traders did not consider forecasts of Wednesday lows in the teens and 20s in the Northeast and Midwest — and as low as around zero in the Minneapolis area — to be sufficient to rally prices in post-holiday business Tuesday. Following another below-expectations storage pull report last Thursday, use of storage supplies was believed to be a continuing significant factor in suppressing demand for spot gas.

With Friday’s predicted lows ranging from sub-zero to the teens and 20s from the Rocky Mountains through the Plains and Midwest into much of the inland Northeast, the surge of heating load was able to rally prices at a solid majority of points Thursday. Cash gas got a small extra boost from the prior-day advance of 3 cents by January futures, which ended a six-session losing streak for the Nymex contract.

High temperatures only in the teens sent demand soaring in New York City Monday, driving natural gas spot prices to a high of $60 at Transco Zone 6 in New York. The average came quite a bit lower at near $40 and the high wasn’t near its $72/MMBtu record set Jan. 14, 2004 — the average that day was $44.81. Nevertheless, prices at Zone 6 New York were up more than $24/MMBtu from daily spot prices on Friday. Most other Northeast points were up only $3-5 from Friday’s levels.

While not quite the “crash” that some had seen as possible, prices did fall substantially in Friday’s trading for the holiday weekend. Nearly all declines were between about a dime and 20 cents, but a few Northeast citygates took even bigger hits while Florida citygates were flat.

After opening at Tuesday’s low of $2.23 and quickly checking down into the teens, the natural gas futures market rebounded late in the session Wednesday on the news that the market withdrew a whopping 190 Bcf from underground storage facilities last week. However, the 30-minute rally was not enough to take back four hours of selling pressure, and as a result the February contract finished with a 5.3-cent loss at $2.228. The out months followed suit, propelling the 12-month strip down to $2.541, a 4.4-cent loss for the session.