Spot gas prices for Thursday delivery continued the volatility shown in Tuesday’s trading and took a big hit primarily in Midwest, Northeast and East market areas as temperatures were forecast to rise sharply before receding. Overall, next-day prices on Wednesday were down, and only a handful of points escaped the pervasive red ink. At the close of futures trading, April shed 0.9 cent to $4.402 and May was off 1.9 cents to $4.395. May crude oil jumped $1.07 to $100.26/bbl.

Chicago and the Midwest proved to be right in the thick of volatile weather patterns. “Despite a few days of bitter, winterlike cold in the city, Chicago will undergo a milder weather pattern after midweek,” said AccuWeather.com’s Kristen Rodman. “After temperatures Wednesday morning hovered in the teens, temperatures will begin to rise Thursday morning, [and] will be near 50 F on Thursday, as rain and thunderstorms plague the region throughout the day.

“Overnight temperatures will remain at or below freezing through the week, despite warmer daytime highs. A few showers are possible Friday but periods of sunshine will be present both Friday and Saturday. Although both days will be a little chillier than Thursday, temperatures will still stay in the 40s.”

Near-term cold is expected to linger at more northerly points, with only the Southeast approaching spring-like conditions. AccuWeather.com reported that the high Wednesday in Minneapolis of 41 was expected to drop to 39 Thursday before sliding to 33 on Friday. The normal high in Minneapolis is a relatively balmy 47. Chicago’s 38 high temperature on Wednesday was seen rising to 49 Thursday but slipping back to 42 on Friday, off from the normal of 50. Farther south in Louisville, KY, Wednesday’s high of 44 was seen jumping to 58 on Thursday and reaching 66 on Friday. The seasonal high is 62.

The modest one-day warmup in Chicago was enough to tug Midwest quotes lower. Gas on Alliance was seen $1.81 lower at $5.56, and deliveries to the Chicago Citygates fell 48 cents to $4.69. Gas at Joliet fell $1.72 to $5.52, and at Northern Natural Ventura gas was seen at $4.86, down $1.16. On Consumers, next-day packages came in at $5.82, down $1.81, and on Michcon gas changed hands at $5.85, down $1.71.

A Great Lakes marketer was struggling with bidweek issues and was uncertain to what level to commit April index purchases. “We are hearing that Consumers has bought a lot of transportation on the pipelines and we are hoping we are not going to be in any difficulty purchasing April gas,” said a Michigan marketer.

The marketer said the company normally sees a basis on Michcon of between 20 cents and 30 cents, but the 66-cent preliminary basis for April bidweek reported by the newly released NGI Bidweek Alert, which gets updated daily during the last five business days of each month, “was right about what we are seeing.

“We are not sure what we are going to do for April bidweek. We are still working it,” he added.

The marketer admitted that the company was toying with the idea of floating some April volumes with the idea that milder April weather would moderate current prices.

Biggest declines were seen in the Northeast as milder weather was seen just around the corner. “The wake of strengthening blizzard off the New England coast will keep the Boston area cold through Thursday morning but milder weather is coming soon,” said AccuWeather.com meteorologist Alex Sosnowski. Wind chill]temperatures “will dip to near zero at times Wednesday night. Actual temperatures will rival the record low of 16 F set in 1873, [but] after another cold start Thursday, a warming trend is in store Thursday afternoon into Friday.”

Gas at the Algonquin Citygates tumbled $7.68 to $7.08, and deliveries into Iroquois Waddington shed $2.88 to $6.19. On Tennessee Zone 6 200 L Thursday packages free fell $10.46 to $7.39.

Gas on Tetco M-3 Delivery fell $1.00 to $4.48 and gas bound for New York City on Transco Zone 6 skidded $4.44 to $4.57.

Weather forecasters are calling for a cool April. Commodity Weather Group in its Wednesday 11- to 15-day outlook showed below-normal temperatures hovering throughout the northeastern one-fourth of the country. “A departing major Atlantic storm [Wednesday] whips around stronger winds for East Coast cities, offering significant wind chill demand enhancements to the last piece of this week’s strong cold air mass,” said President Matt Rogers.

“The pattern still becomes more variable in the six-15 day time frame, but the cooler periods seem to outweigh the warmer ones yet again for the Midwest and East, although we do not see any cold outbreaks to rival this week’s levels. Otherwise, Texas sees some brief bursts of heat at times over the next two weeks, with rounds of stronger 80s. California and the Southwest see some cooler variability at times, but the warm periods continue to outweigh them, although the risk for more 90s in Phoenix early next week faded a bit. The extended range CFS [Climate Forecast System] guidance continues to lean the Midwest to East cool deeper into April yet.”

Analysts saw Tuesday’s advance mostly as a result of a cooler temperature outlook as opposed to any bullish tone to expected Department of Energy (DOE) storage figures. According to Tim Evans of Citi Futures Perspective, “the consensus view for Thursday’s DOE storage report is still in formation, but we wouldn’t say estimates played much of a role in Tuesday’s advance, with most of the estimates we’ve seen so far coming in at the low 50s, just a minor step up from the prior week’s 48 Bcf net withdrawal.

“With our model projecting a somewhat higher 61 Bcf draw, we do see some potential for a bullish surprise. The anticipated draw is still supportive compared with the five-year average of just 7 Bcf, but the market has certainly managed to ignore such variances over the past four weeks.” Last year, however, 90 Bcf was pulled.

Others see somewhat lesser withdrawals. Analysts at United ICAP calculate a pull of 55 Bcf, and a Reuters survey of 26 traders and analysts showed a sample mean of 54 Bcf. with a range of 48 Bcf to 76 Bcf. The five-year average is for just a 7 Bcf pull.

By April 11, Evans is forecasting that the year-on-five-year deficit will reach a stout 1,012 Bcf, in part due to colder weather, which added 18 Bcf more demand than previously predicted. “Although it’s possible that the 18 Bcf in additional heating demand was a critical volume that tipped the balance in the market from bearish to bullish, we also think the market may have been somewhat undervalued, reaching about the limit of how far it could sink at a time with inventories at the lowest level since 2003. A rally back to $4.50 would confirm that the wider market has reached a similar conclusion,” Evans said Tuesday.

For the moment, demand figures aren’t quite in alignment with the increases he noted. “Despite cooler than normal temperatures, Southeast demand has decreased -1.2 Bcf/d day-on-day to 15.8 Bcf/d from yesterday’s 17.0 Bcf/d,” said industry consultant Genscape in a Wednesday morning report. In addition it said demand in the Midwest “decreased -1.3 Bcf/d day-on-day to 13.2 Bcf/d from [Tuesday’s] 14.5 Bcf/d.