With most of North America under siege from extreme cold and winter storms that caused power outages, disrupted transport to work or school and resulted in numerous flight cancellations, the cash gas market responded with a continuing ascent of prices at nearly all points Wednesday. Several gains were measured in triple digits in the Northeast and Gulf Coast.

The West, where freezing temperatures were considerably less widespread than elsewhere, recorded nearly all of the smallest increases in a market that ranged from a little less than a nickel to nearly $2.90 higher overall. A few flat points, along with Cheyenne Hub’s decline of nearly 15 cents, were the exceptions to overall firmness.

Transco Zone 6’s New York City pool repeated as the most expensive point for gas, seeing a top quote of $25.50 and an average of more than $19. The Big Apple is expected to repeat Wednesday’s low in the mid-teens Thursday. All citygates in the Northeast, where Wednesday’s blizzard conditions that extended southward into the Mid-Atlantic were expected to be followed by less precipitation but windy bitter cold Thursday, averaged nearly $13 or more.

Four Gulf Coast points and Dominion in Appalachia joined the Northeast in posting $10-plus averages.

In addition to the super-strong weather fundamentals, cash numbers got additional support from the previous day’s 14.1-cent rebound by March futures and from speculation that last week’s storage withdrawal — to be reported Thursday morning by the Energy Information Administration — may exceed the weekly record of 260 Bcf set in January 1997 (see related story).

A Reuters survey of 24 industry sources found an average expectation that 252 Bcf was taken out of storage in the week ending Feb. 9. Estimates ranged from 230 Bcf to 271 Bcf, the news service said.

Midcontinent/Midwest gains were fairly modest in comparison to the rest of the East, which was partly a function of the Midwest’s abundant market-area storage facilities. Also, a slight moderation trend is upcoming. For example, Chicago’s low is predicted to go from around zero Wednesday to nearly 10 degrees Thursday.

All existing pipeline OFO-like constraints were still in force, although there were no reports of any problems in making deliveries. Florida Gas Transmission added to the list, although its Overage Alert Day carried a rather lenient negative imbalance tolerance of 25%. And some sign of easing transport constraints down the road came from Southern Natural Gas, which said its Type 6 OFO would remain in effect through Friday but it was “too close to call” on whether the OFO would be extended into Saturday.

Prices stand a good chance of softening toward the weekend as weather predictions turn milder. The National Weather Service’s (NWS) six-to-10-day forecast for the Feb. 19-23 period sees a substantial retreat in very cold weather and considerably milder temperatures in the central U.S. The agency predicted below normal conditions only along the East and West Coasts, with the West Coast forecast expanding through the Pacific Northwest into central Idaho and western Montana at the north end and into southwest Arizona at the south end. NWS expects above normal readings in a wide swath of the nation’s middle, extending from eastern Montana to Michigan’s Upper Peninsula in the north and going south as far as North Louisiana, the northern half of Texas and the northeast half of New Mexico.

A Calgary-based producer agreed that the near-term forecasts are conducive to approaching price softness. However, although March futures gave back most of their Tuesday rally by falling 12.6 cents Wednesday, he thinks the cash market will have one more day of weather-based strength Thursday before retreating for the long weekend in Friday’s trading. He noted that Calgary traders will have an Alberta-only provincial Family Day holiday Monday that will coincide with Presidents Day in the U.S.

Despite the smaller Midcontinent/Midwest advances in the East, the producer considered the market as still relatively strong at Chicago and Northern Natural-Ventura. He was unaware of any significant transport constraints, but said Alliance was cutting Authorized Overrun Service from 27% to 8% Thursday. That was relatively minor, though, and only expected to last one day, he said. Calgary-area has been very cold and snowy through Wednesday, but was already starting to break that afternoon, he said.

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