An absence of severe weather threats, lower industrial load over a weekend, and the screen’s previous-day quarter decline set the stage for further mostly moderate softening in a sedate Friday market. A small uptick in Tennessee Zone 6 ran contrary to losses at all other points ranging from less than a nickel to nearly 30 cents.

Sources continued to emphasize that even with temperatures still remaining in the vicinity of freezing from the upper Rockies eastward across the northern U.S., the fact that such conditions represented a moderation from what had occurred before last week kept prices from maintaining their previously lofty levels. They also stressed that the storage withdrawal season is entering its final phase, which tends to lessen dependence on fresh spot gas supplies.

There’s a lot of gas around and nobody is seeing any shortness, an eastern marketer said. Weather is “seasonal, or maybe slightly below seasonal,” in the Northeast, he went on. “The thinking seems to be that yes, it’s still cold, but it’s so much nicer than a couple of weeks ago, so who cares? Despite what the groundhog said at the beginning of the week, in many traders’ minds we’re practically at the end of winter.”

A Midwest trader had similar perceptions of a status quo market that is getting quieter after some mid-winter excitement. “The weather’s dying down a bit, and there are no major issues anywhere,” he said. The trader commented that he was “pretty much taking care of deals already in place,” with little in the way of new business.

Traders in the Florida market had little concern about Florida Gas Transmission’s warning of a potential Overage Alert Day notice, a marketer said. After all, highs in the state were in the 80s Friday, he added, although The Weather Channel predicted they would sink into the 50s through 70s over the weekend. “I don’t think there would be even a ‘potential’ OAD if it weren’t for that Gulf South work on the Mobile Bay Lateral” (see Daily GPI, Feb. 5). “The FGT folks said they don’t expect one [OAD] to be issued.”

Sonat did issue an OFO Type 6 to guard against short imbalances (see Transportation Notes) as a cold front started to bring chilly temperatures and lots of precipitation to its Southeastern market area; however, the precipitation was expected to be liquid rather than solid.

In another OFO-like restriction note, a trader on the Northern Natural Gas system was puzzled about the pipeline attempting to sell gas at the same time it kept a System Overrun Limitation notice in effect through Saturday (see Transportation Notes). However, the pipeline explained in a bulletin board posting that its Operational Storage (OS) band for February is 12-16 Bcf, and it was making sales “to reduce current OS inventories to approximately 14 Bcf. The current OS level is 15.6 Bcf.” NNG was taking bids for daily gas sales up to 100 MMcf/d and to sell “up to 1.5 Bcf, to be scheduled directly to shipper’s storage account(s).”

“Warmer weather going around dropped prices all over, but especially in the West,” said a trader in that region. “There is not too much heating load with temperatures in the 60s and 70s” in California and the desert Southwest, he noted.

Even Calgary was getting slightly above freezing in daily highs, a producer reported.

An indicator of light demand for Rockies gas was Kern River reporting high linepack levels in all four segments of its system. El Paso still had an Unauthorized Overpull Penalty in place Friday, but the Waha/Permian Basin market recorded the day’s biggest price drops as intrastate Texas demand remained on the light side for early February.

Citigroup analyst Kyle Cooper’s initial estimation for the upcoming storage report looks for a withdrawal in the 180s Bcf. That would compare with 150 Bcf a year ago and a five-year average of 140 Bcf. “Withdrawal must equal 161 Bcf or greater to remain on track for inventories to end the season at 1,000 Bcf,” Cooper said.

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