Even with temperatures expected to be above normal this week in the eastern two-thirds of the U.S., in the heart of the winter season that can still mean some pretty chilly conditions. The cash market found enough heating load, supplemented by last Friday’s 16.7-cent advance in February futures and the return of industrial load from weekend hiatus, to register gains at a solid majority of points Monday.
Flat to a little more than 35 cents lower numbers were concentrated in the Northeast but also occurred at several points in the South. Gains ranged from a couple of pennies to a little more than 30 cents.
Cash prices will continue to have a modicum of prior-day screen support after the February natural gas contract managed to ignore major weakness in Nymex’s petroleum products futures and eked out a gain of 3.8 cents Monday.
Both of the OFO-like constraints still in effect Friday or during the weekend were either lifted Saturday or will be gone by the start of Tuesday’s gas day (see Transportation Notes), leaving the pipeline grid virtually free of any significant impairments.
The Mid-Atlantic and Northeast will continue to see record-setting warmth Tuesday behind a warm front that moved through on Sunday, according to AccuWeather.com. However, “temperatures more typical of April will not be long-lived,” the forecaster continued, adding that a storm system making its way into the Midwest Monday “will spread rain east ahead of a sharp cold front that will squash the warmth in the East on Wednesday.”
The South will continue to record unseasonable highs in the 70s for the most part Tuesday, but sub-freezing lows will be returning from the Midcontinent and Midwest through much of the interior West. For instance, Oklahoma City and Des Moines, IA, had Tuesday lows of 27 and 21 degrees, respectively, in their forecasts for Tuesday. Temperatures are falling especially fast in Oklahoma City, which bottomed out around 57 Sunday and 39 Monday, said Madison, WI-based Weather Central.
The Rockies recorded double-digit gains at all points as Tuesday lows around 20 degrees are expected in Denver and Cheyenne, WY.
Western price increases were pretty much all weather-driven by the cooler temperatures, said a regional trader. He noted that a weekend of harrowing snow and rain storms in Northern California apparently had no impact on PG&E gas operations, adding, “It’s all on the electric side.” The dual utility was getting outside help Monday in its struggle to restore power to thousands in its service territory (see story in Power Market Today).
Freezing temperatures may have seemed to refute the accuracy of a National Weather Service forecast of above-normal readings from the Rocky Mountains through the East Coast during the Jan. 7-11 workweek (see Daily GPI, Jan. 3). But a utility buyer in the Midwest said it actually was a bit warmer than expected Monday in his company’s service area.
Strategic Energy & Economic Research analyst Ron Denhardt looks for a 165 Bcf storage withdrawal to be reported for the week ending Jan. 4.
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