Despite a weather map dominated by fairly moderate conditions for mid-December, cash gas was finding enough heating load in northern market areas to keep prices rising substantively at most points Wednesday.

Losses of up to 85 cents at several Rockies/San Juan Basin points, along with a couple of flat locations, ran contrary to the market’s overall upward movement, in which gains ranged from a nickel to about 40 cents. Excluding the exceptions, the price hikes were generally consistent across geographic regions.

Physical gas had neutral price guidance from essentially flat prior-day futures, but it can count on some support Thursday from the January contract, which realized a gain on the day of 24.3 cents to $7.673.

However, one source questioned whether cash prices could extend their somewhat improbable bullish streak into a third day, even with backing from Nymex. Outside Canada and the northern tier of U.S. states, it’s rare to find a forecast of Thursday lows around freezing or less, he noted. He also pointed out that most of the South can expect conditions more reminiscent of spring than winter Thursday.

A Houston-based marketer was a bit more bullish than that, saying he expects prices to see further small gains Thursday, based largely on Wednesday’s screen strength, before softening in Friday’s trading for the weekend. But he agreed that it was kind of hard to explain a second day of rising cash numbers when heating load doesn’t seem to be all that strong.

“The New York-area utilities I talked to said they weren’t buying any new gas” Wednesday, the marketer said. However, he was aware of some people that are in short positions at New England citygates, either in spreads to some other point or they entered the month “outright short” on supplies, so that’s accounting for some of this week’s cash price strength, he said.

But “it’s just a game,” he continued, adding that “the ‘real buyers’ tell me they aren’t doing much right now.” Some traders don’t expect a very big storage draw to be reported Thursday morning, which would be kind of bearish and a further argument against rising prices, he said. He suspected that speculation played a significant role in the strength of January natural gas futures Wednesday, which also got a boost from rising crude oil numbers after the government reported falling inventories for all petroleum-based products represented in Nymex’s energy futures complex.

Nicor is restricting volumes at its citygate again, the marketer said, which tends to elevate prices into Nicor’s system but depress them at the other two Chicago-area LDCs, Peoples and NIPSCO.

While they will be cooler Thursday than the South, the Midwest and Northeast still will be feeling unseasonably mild temperatures, The Weather Channel said. Meanwhile, a fair amount of heating load will be on tap as a powerful storm brings heavy snow and damaging winds into the Pacific Northwest and northern Rockies, the forecaster added.

The National Weather Service (NWS) predicts above-normal temperatures during the Dec. 18-22 workweek everywhere in the Lower 48 states east of a line that begins along the western border of North Dakota but curves southeastward to exclude all but the eastern edges of South Dakota and Nebraska before curving back to the southwest through central Kansas, the eastern end of the Oklahoma Panhandle and West Texas. NWS expects below normal readings in the Southwest and Rockies to as far north as the southern halves of Oregon and Idaho and as far east as southeast Wyoming, eastern Colorado and central New Mexico.

A Reuters survey of 21 industry players found an average projection of a 150 Bcf withdrawal from storage for the week ending Dec. 8. The estimates ranged from 130 Bcf to 178 Bcf, the news service said. Bentek Energy is expecting a pull of 156 Bcf to be announced.

©Copyright 2006Intelligence Press Inc. All rights reserved. The preceding news reportmay not be republished or redistributed, in whole or in part, in anyform, without prior written consent of Intelligence Press, Inc.