Despite a mid-term outlook for mostly moderate temperatures in nearly all regions and warnings of excess supplies at some locations in the West, cash prices were higher at most points Monday. A return of freezing lows in the Rockies after a relatively mild weekend, along with temperatures dipping into the 30s in both the Northeast and Midwest, got a modest amount of support from industrial demand returning from its typical weekend hiatus in boosting cash quotes.
The previous Friday’s drop of 1.7 cents by December futures had essentially no impact on the cash market.
Nearly all of the declines ranging from a couple of pennies to a little more than 35 cents occurred at western locations. Otherwise, numbers ranged from flat to nearly 35 cents higher.
The cash market will find it tough to sustain its upward momentum Tuesday after prompt-month futures dived 22.1 cents Monday (see related story).
Lows in the 20s and 30s will extend from the Rockies through the Upper Plains and Midwest into the Northeast Tuesday, but that was about it as far as significant cold could be found in the forecast. Cool conditions have begun to occupy much of the South, but that primarily means air conditioners being turned off and little in the way of furnaces being turned on.
Both SoCalGas and PG&E had high-linepack OFOs in effect for Tuesday, but the impacts were strikingly different. Perhaps because PG&E’s OFO was known as trading started, Malin and the PG&E citygate dropped nearly a quarter and a little more than 30 cents, respectively. But SoCalGas did not communicate its OFO until early afternoon, well after the end of cash trading, and SoCal citygate and Southern California border quotes were up a little more than a nickel and about 20 cents, respectively.
A “supply-demand imbalance leading to high linepack” was creating the potential for an imbalance tolerance change on its Alberta system Monday, NOVA said. NOVA Inventory Transfer prices dropped about C15 cents.
Dominion said its working gas storage inventory stood at 290 Bcf as of last Thursday, which compares with 279 Bcf on Oct. 29, 2008 and 289 Bcf on Nov. 1, 2007.
A Texas-based marketer said it was reasonable to expect lower cash prices Tuesday because of Monday’s screen weakness. Storage injections are “pretty much over,” he said, but people will keep trying to stuff whatever they can into storage during the next couple of weeks.
Basis spreads are tight, the marketer said, and despite Monday’s gains he wasn’t able to find much gas demand in the Northeast. He called it a “typical quiet beginning” for the start of the monthly aftermarket.
The National Hurricane Center (NHC) finally had a couple of blips on its Atlantic radar again Monday, but neither appeared significant to the gas market. A nontropical gale center about 350 miles east-northeast of Bermuda was expected to move to the north and then northeastward. Some development was possible for an area of showers and thunders in the extreme southwestern Caribbean Sea, NHC said, but there was little chance of it becoming a tropical cyclone during the next 48 hours.
The Weather 2000 forecasting firm had negative news for bullish gas traders in a Monday advisory. Indian summer was expanding across a vast majority of the U.S., it said, and winter is “still far away.”
Also, the National Weather Service predicted above-normal temperatures for the Nov. 7-11 period from nearly all of the desert Southwest northward through the eastern ends of Oregon and Washington state and eastward through the northern sections of the South to the northwest corner of Georgia and northward from there through the eastern edge of Ohio and including parts of New York and Massachusetts.
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