All points were on the same price page Tuesday, and that page was moving lower. A warming trend in the East, a continuing string of screen weakness (augmented by big dives in Nymex’s petroleum product contracts) and growing pressure to withdraw still-abundant storage gas (see TGT item in Transportation Notes) all contributed to the softness.

Losses were in double digits at almost every point and in general ranged from about a nickel to nearly a dollar. Northeast citygates recorded most of the biggest drops, while the Midcontinent/Midwest and West tended to see the majority of them less than 30 cents.

Although Florida Gas Transmission still had an Overage Alert Day in place Tuesday, a Florida citygate quote plunged by more than $1.80 and Florida Gas Zone 3 in the producing area fell about 90 cents.

On Monday there was slight more than a dollar basis spread from Henry Hub to Transco Zone 6-New York City, but that had shrunk to about 70 cents Tuesday. That should cover variable transport costs on Transco, one trader said, but moving gas to the Northeast on Texas Eastern, where the Hub/M-3 spread was only about 60 cents, would be out of the money due to Texas Eastern’s higher fuel charges.

A forecast for a fresh blast of cold in the Midwest starting Thursday, plus the spread of low temperatures Wednesday to most areas of the West outside the southern fringe of the desert Southwest, offers a chance for moderate rebounds in those markets Wednesday. But prices will be hard-pressed to mount a rally in the face of the screen declining another 12.9 cents Tuesday to make it seven down trading days in a row, plus the fast-approaching end of storage withdrawal season, which carries with it mandatory requirements to empty specified percentages of many accounts.

A source in western Appalachia said his area did not get pummeled by Sunday’s blizzard nearly as much as the Northeast, receiving only 4-6 inches of snow. And that was rapidly melting Tuesday amid bright sunshine, he said.

A Gulf Coast producer said the cash price weakness was pretty significant, but he saw a fairly substantial bit of recovery near the end of trading. However, even the return of severe cold in the Northeast this weekend isn’t going to make much of a dent in bountiful storage levels, he said. He considered Tuesday a “boring day” in trading, and felt like mid-month doldrums might be setting into the market.

“It doesn’t matter to us” which direction prices are moving, a marketer who trades Midcontinent and Southwest points said. As long as there is a lot of volatility, “that’s what we like,” she added.

The National Weather Service (NWS) continues to see below normal temperatures for nearly all of the U.S. during the Feb. 20-24 period, which includes the U.S. Presidents Day holiday on Monday (along with Alberta’s provincial Family Day observance). However, as Citigroup’s Kyle Cooper pointed out in a Tuesday afternoon note, “a vast majority of the impressive colors on the weather maps are over areas where few people live.” NWS excludes only the southern edge of New Mexico and from the southern half of Texas through southern North Carolina from its forecast of below normal readings. The coldest anomalies from normal will occur in the northern tier of states from Washington through Michigan, it said. Above normal conditions are expected in South Texas and in the Southeast south of a line from the southeast corner of Louisiana along the coastal edges of Mississippi and Alabama through southern Georgia into the southeastern edge of South Carolina.

The next wave of Arctic air is poised to enter the U.S. within 48 hours, and this one will be so intense that it will spill over into the West as well as the East, a Weather 2000 advisory said Tuesday. Daytime temperatures up to 45 degrees below normal could be registered in the northern Plains, while the Upper Midwest will get its own blizzard, it added.

“It’s not very often that several states in the U.S. experience afternoon temperature anomalies of 25-45 degrees colder than normal during the heart of the winter, but that’s exactly what’s in store for the north-central U.S. this week,” the consulting firm said. “These incredibly frigid readings, following on the heels of the historic blizzard in the East, is La Niña’s way of making up for all the wintry weather [that] was being pent up during the January thaw. For the bigger cities this will translate into Minneapolis remaining in the single digits all day, Chicago struggling to get above 19 [degrees], and Cincinnati hoping to break the freezing mark over the holiday weekend.”

These colder waves will continue to arrive in a sequence with downstream (eastern) moderation of temperatures each time the next one pours in from Canada, and they will only provide glancing blows to the Florida/Gulf Coast region, as these southern areas will act to enhance the thermal gradient by remaining generally milder than normal, Weather 2000 said.

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