After all the winter storm excitement in recent weeks, themarket appeared to be growing calmer Wednesday yet still managed tokeep pushing prices higher. Most of the upticks were between anickel and a little over a dime, with the Northeast remaining thebastion of dollar-plus increases.

Traders were hesitant about ascribing the firmness to anyparticular factor, mainly because they could see little to keep theuptrend going. A mild gas futures rise provided a bit of support,but crude oil and heating oil futures were back on a downslide.Cold weather was moderating a bit in most areas amid predictions ofwarmer temperatures to come. Although OFOs remain in place on MRT,Florida Gas and Sonat, virtually all other OFOs have been lifted bynow.

One marketer thought prices were being driven by a high”perceived value” of gas. The storage report of a whopping 242 Bcfin withdrawals last week wasn’t much of a shocker, he said, becausehis company’s own internal prior estimates had been higher thanthat.

However, a Texas trader saw prices “dropping like a rock” afterstarting high and going higher. There was both utility load andstorage plays to support the early rises, he said, adding that twoTexas utilities were buying significantly more gas from him thanthey had in recent days. “But in South Texas, sellers there sawHenry Hub and Houston Ship Channel [prices] start around $2.90 andthought that meant they should be able to get at least $2.82 fortheir gas. But then many of them wound up dumping gas in the high$2.60s near the end of the morning after waiting too late.”

Chicago citygates are deriving strength not from basicsupply/demand factors, a large aggregator said, but rather from theGulf Coast and East Coast market areas. “Gas that would normallytry to find a home in Chicago is being sent to more lucrativemarkets in those regions,” forcing Chicago-area buyers to competeharder.

For a trader in the California market, the big thing Wednesdaywas a potential low-inventory OFO on the PG&E system that somepeople expected but which didn’t get issued. He did his PG&Ecitygate deals in the low to mid $2.80s.

“I guess the groundhog gave bullish traders some encouragement.Surely they trust the forecasting abilities of a large furryrodent,” said a laughing Calgary source. Pennsylvania’sPunxsutawney Phil, the most famous of several used in Groundhog Dayceremonies, had to be dragged from beneath a tree stump by humansbut then cast a shadow, supposedly meaning that winter will lastthrough mid-March.

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