Warmer

Forecasts of moderately higher natural gas demand, a spike in domestic output, a “healthy and comfortable” level of storage, a slightly warmer winter and a stagnant economy point to flat pressure on wholesale gas prices going into the winter heating season, although there may not be an “overnight impact” on consumer bills, according to the Natural Gas Supply Association’s (NGSA) winter outlook released last Thursday.

Forecasts of moderately higher natural gas demand, a spike in domestic output, a “healthy and comfortable” level of storage, a slightly warmer winter and a stagnant economy point to flat pressure on wholesale gas prices going into the winter heating season, although there may not be an “overnight impact” on consumer bills, according to the Natural Gas Supply Association’s (NGSA) winter outlook released Thursday.

Florida Gas Transmission allowed a multi-day Overage Alert Day for market-area customers to lapse Sunday, but reinstated it Monday due to forecasts of warmer weather in Florida. The tolerance for negative daily imbalances was set at 25%.

It’s not exactly going to be “warm” in northern market areas Friday, but the fact that it will be “warmer” was enough to cause prices to fall at all points Thursday. The previous day’s 1.2-cent decline by March futures added a small amount of negative guidance for the cash market Thursday.

The most recent of an extended series of quick-hitting blasts of arctic air that has made a shambles of forecasts for a warmer-than-normal February created abundant heating load for Wednesday in northern market areas. The result was cash price gains across the board Tuesday. The return of industrial load from a holiday weekend absence also was a bullish factor.

Citing customer cooperation and warmer weather, Northwest said it will adjust the Overrun Entitlement for all Receiving Parties located north of the Plymouth Compressor Station — including the Grants Pass, Spokane and Wenatchee Laterals — to Stage III (13% tolerance for daily imbalances) effective Tuesday; the entitlement had previously been set as Stage II with 8% tolerance (see Daily GPI, Dec. 5). There is currently no declared entitlement south of Plymouth, Northwest said, but if Receiving Parties south of Plymouth begin drafting excessively, it may declare an entitlement there.

As Wednesday’s swing to mixed pricing that was mostly softer had hinted, the impending return of warmer weather in the East and the depressant effect of four straight losing sessions by December futures combined to bring cash prices down hard at nearly all locations Thursday. Only flat El Paso-San Juan numbers averted a total sweep of softer quotes.

Citing forecasts of warmer weather in Florida and low linepack levels, Florida Gas Transmission issued an Overage Alert Day for market-area customers Thursday that carried a 25% tolerance for negative daily imbalances.

Slightly warmer weather, falling demand and weaker futures prices on Tuesday prompted most cash points to fall Wednesday, with the largest drops of $1-4 in the Northeast. However, a number of Midcontinent points rose anywhere from a few cents to 15 cents as colder weather returned to the regional forecast and small increases were seen in a number of other regions.