Unseasonably

With cooling load remaining unseasonably light in most of the East and Thursday’s 13.6-cent futures slide providing negative guidance, prices dropped in most of the cash market Friday. Although far short of a heat wave, forecasts of weekend highs in the low 90s along with high humidity in the lower Northeast proved sufficient to generate moderate gains at regional citygates.

CIG noted Friday that unseasonably cold weather had moved into its Front Range market region and was predicted to continue into this week. “With the high market demands anticipated for this period combined with high firm transportation load factors, CIG is concerned that our ability to absorb imbalances related to underdeliveries at receipt points or overdeliveries at delivery points will be limited to a significant degree,” it said. “Therefore, CIG expects operators to manage their confirmations to match flow rates to scheduled quantities, factoring in freeze-offs and other conditions as necessary, particularly while the cold weather impacts CIG’s field and pipeline operations.” At locations that are not flowing at scheduled rates, the pipeline plans to place underperformance caps during the scheduling process to reduce nominations to match such flow rates. No Notice shippers should anticipate that CIG will be able to support a maximum of 100,000 Dth/d of authorized delivery overruns, it said.

Citing unseasonably warm weather and reduced natural gas demand, the Energy Information Administration (EIA) in its Short-Term Energy Outlook for January lowered the ceiling for spot gas prices this winter to less than $7/Mcf. The agency last month predicted that winter spot prices would stay below the $9/Mcf mark (see NGI, Dec. 18, 2006).

Citing unseasonably warm weather and reduced natural gas demand, the Energy Information Administration (EIA) in its Short-Term Energy Outlook for January lowered the ceiling for spot prices this winter to less than $7/Mcf. The agency last month predicted that winter spot prices would stay below the $9/Mcf mark (see Daily GPI, Dec. 13, 2006).

With natural gas supplies in storage remaining ample and weather forecasts still calling for unseasonably warm temperatures in most major gas demand regions, January natural gas futures worked lower in Monday’s overnight Globex trading session and continued the plunge in Tuesday’s regular session. With the lack of bullish fundamentals, the January contract, which expires Wednesday, threatened a breach below $6 with a low on the day of $6.060 before ultimately settling at $6.113, down 52.2 cents on the day.

Noting unseasonably mild conditions being predicted in its market area for the upcoming weekend and several days thereafter, Transco said effective with Friday’s gas day until further notice it will not allow any excess storage injections under Rate Schedules WSS, WSS-OA or GSS, nor will it allow any due-pipeline imbalance paybacks. Also, pool tolerances were to be reduced to 1% starting with Evening Cycle nominations for Friday, and the pipeline is barring any incremental Park service quantities and the payback of any Loans under Rate Schedule PAL (Park and Loan).

Although cold fronts or snow were in the Friday forecast for sections of all four main geographic regions of the U.S., the fact that unseasonably moderate conditions had returned to the overall weather picture carried the trading day Thursday and resulted in diving prices across the board. The screen’s prior-day plunge of nearly half a dollar and increasing comfort levels about storage put further downward pressure on cash quotes.

Pressured by the bearish agreement of mild current temperatures and unseasonably warm weather forecasts, the natural gas futures market tumbled lower in waves of selling during both Sunday night’s Access trading and Monday’s regular open-outcry session.

Cash prices continued to be propelled upward Tuesday by an unseasonably late blast of winter weather in the northeastern quadrant of the U.S. that even sent a touch of mild morning chill far enough south to be felt by traders in Houston.