Heating load was still plentiful going into the weekend, but prices dropped across the board anyway Friday. The cash market was swayed mostly by the subpar storage pull that was reported Thursday and the accompanying screen weakness, along with the National Weather Service’s forecast of above-normal temperatures during the coming workweek in most of the East and as far into the Southwest as Arizona (see Daily GPI, Feb. 18).

Losses ranged from a little less than a dime to nearly half a dollar and were fairly consistent across geographic market regions.

The cash market will find it difficult to manage a rally Monday after March futures fell another 7.2 cents Friday (see related story).

The Florida citygate saw Friday’s biggest loss despite Florida Gas Transmission issuing an Overage Alert Day (see Transportation Notes). Other new pipeline constraints included a System Overrun Limitation in one Northern Natural Gas market area, and Southern Natural Gas considered it likely that it would issue an OFO for Monday.

Supply issues were shifting again in the West. Only a day after ending a low-inventory OFO, PG&E had a high-inventory OFO in effect Saturday. El Paso and Kern River, which had been reporting low linepack Thursday, both said linepack had returned to normal Friday.

Midwest citygates recorded substantial dips in spite of Saturday lows being predicted to still be mostly in the teens and single digits. A fast-moving clipper storm was due to bring snow accumulations of three to eight inches to the southern Great Lakes area Saturday, according to The Weather Channel (TWC). By early this week, however, regional temperatures are forecast to be roughly divided between above normal in the eastern half and normal in the western half.

The Midwestern clipper storm would arrive in the Northeast late Saturday still carrying snow with it, TWC said, but although much of the Northeast is due to begin this week with temperatures five to 15 degrees below average, a moderating trend is forecast for Tuesday and Wednesday.

Freezing lows were still expected Saturday in the eastern South as a cold front associated with the Midwest’s clipper storm moved into the region, but they would be offset to some degree by highs from the mid 40s to the upper 50s. A significant warm-up will begin in the Midcontinent Monday and spread eastward into the Southeast by midweek, TWC said.

A Pacific storm would be lurking off the coast, but most of the interior West would remain dry through the weekend with temperatures expected to be seasonally normal to 10 degrees above average in many cases Saturday, according to TWC.

With the official start of spring only about a month away, a Northeast marketer thought a “winter’s over” mindset was taking hold in the market and preventing cold weather from having much positive impact on prices. The low-volume storage pull reported Thursday again reinforced the perception that there is going to be plenty of inventory left over when withdrawal season ends, and some are worrying about a possible storage glut leading to a market crash this summer, he said. The marketer said he didn’t think anybody had trouble handling the weekend restrictions being implemented by Tennessee and Transco (see Daily GPI, Feb. 20).

He reported not hearing any March bidweek talk yet, saying it was too early for many of his company’s trading counterparties to get active in next-month business.

Noting that the Rockies market was still clinging to some $3-plus pricing Thursday but was solidly below $3 Friday, a producer in the region said numbers exceeding $3 were still economic for many producers but the $3 level was getting marginal for many. He predicted that if such weak prices continue or get worse, exploration drilling will virtually come to a halt in places like the Piceance and Uinta basins. However, he doubted that any new wellhead shut-ins will occur unless prices get solidly below $2, saying a range of about $1.50-2.00/Mcf is the current cost of producing in much of the Rockies. “It hasn’t been much of a winter” for the region as far as cold weather goes, he concluded.

Analysts at SunTrust Robinson Humphrey/the Gerdes Group said the paltry 24 Bcf storage withdrawal reported for the week ending Dec. 13 caused the surplus versus the five-year average to jump from 3% to 11% on a sequential basis. They anticipate that storage will continue to build relative to the five-year average and should exit the heating season 25% or more above the seasonal norm. “Preliminarily, we anticipate an 80-90 Bcf storage withdrawal [to be reported this] week, bearish compared to last year’s 151 Bcf withdrawal and the 141 Bcf long-term average.”

The drop of 36 in the number of drilling rigs searching for natural gas in the U.S. during the week ending Feb. 20 was less than the previous week’s 50 but hefty nonetheless. The Baker Hughes Rotary Rig Count (https://intelligencepress.com/features/bakerhughes/) said the decline to 1,018 still-active rigs consisted of 32 rigs quitting the search onshore and four rigs being deactivated in the Gulf of Mexico. Its latest tally was down 14% from a month earlier and 29% less than the year-ago level.

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