Appalachia, market-area hubs remain below $1/MMBtu
Weekend production drop fails to buoy cash markets
Regional storage climbs to 1.059 Tcf, just below record
Mild temperatures forecast through late November
New York — Northeast cash markets continued trading near record lows Nov. 9 as regional storage levels push capacity and updated weather forecasts call for milder temperatures through late November.
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Register NowAt the Boston-area Algonquin city-gates hub, cash prices were up about 20 cents from the prior-day settlement to 58 cents, with a similar gain lifting Transco Zone 6 New York to just 42 cents/MMBtu.
In the Appalachian Basin, prices were up only 2-3 cents/MMBtu from the prior session's record lows, with Dominion South trading around 30 cents and Columbia Gas Appalachia at 35 cents, preliminary settlement data from S&P Global Platts showed.
Continued cash-market weakness defied a weekend drop in production which is down 1.7 Bcf/d, or about 5%, since Nov. 6 to an average 31.3 Bcf/d, S&P Global Platts Analytics data shows.
Despite the rapid supply-side response to recent price volatility, near-term market fundamentals point to continued cash-price weakness in the Northeast this month as the region awaits colder weather.
Storage, weather
As the Northeast begins its typical storage-withdrawal season, near-capacity inventory levels are keeping the region awash in excess supply. Over the past week a resurgence in injection demand, which has averaged 1.2 Bcf/d, has pushed inventory levels back toward late-October highs. On Nov. 9, regional storage was estimated at 1.059 Tcf – just 8 Bcf below its record-high November 2009 level.
Mild temperature over the next two weeks will keep the storage markets and prices under pressure.
In Boston, high temperatures will climb into the 70s through Nov. 11, with similar unseasonably warm weather forecast for the New York City metro-area.
Over the next 14 days, population-weighted temperatures in the Northeast are forecast to average a balmy 52 degrees Fahrenheit, according to weather data compiled by Platts Analytics.
Absent a steep drop in production, warmer weather could keep Northeast cash markets well-below $1/MMBtu until later this month – price levels typically seen only during the region's weakest-demand period from late September to October.
Forwards
Earlier this month, forwards markets began pricing-in an increased likelihood for cash market weakness this November. At Dominion South, the balance-of-month gas contract settled Nov. 6 at 70 cents/MMBtu, up from only marginally from a recent low at 63 cents. At Columbia Gas Appalachia, the balmo contract most recently settled at $1.20/MMBtu, Platts M2MS forwards data shows.
Forwards contracts for the peak-demand months of winter have also faced pressure recently as concerns over the regional market's growing supply length mount.
At Dominion South, the January 2021 contract settled Nov. 6 at $2.29/MMBtu, down from over $3 in late October. Over the same period, the January contract at Columbia Gas Appalachi, has also ceded nearly 70 cents, most recently settling at $2.51/MMBtu.
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Northeast spot gas markets to face continued pressure from storage, weather - S&P Global
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