Mixed price movement was even more mixed than usual Tuesday as big and small losses were arrayed against big and small gains. Growing perception that the developing eastern cold snap won’t be quite as severe as earlier expected, combined with Monday’s 21.4-cent drop by December futures, resulted in softness across much of the East.

But forecasts of Wednesday lows from the teens to the 30s in the northern half of the West and interior California had most western points on the rise, topped by triple-digit upticks in the Rockies. Even the desert Southwest no longer had much in the way of cooling load, as Phoenix was expected to peak at 77 degrees Wednesday.

The Midcontinent also has freezing weather in the forecast, which generated gains at most trading points there.

Nearly all losses ranging from a couple of pennies to nearly 70 cents were in double digits. Quotes tended to fall hardest in Louisiana and at Midwest and Northeast citygates. Declines tended to slightly outweigh gains from a couple of pennies to nearly $1.90.

Midwest numbers took big losses everywhere despite an arctic cold front being due to take regional lows to the freezing area Wednesday. The Northeast (except for upper New England) and the South aren’t predicted to start getting the same treatment until relatively late Wednesday.

Rockies Express (REX), which last week said that based on current construction and commissioning progress it anticipated beginning partial interim firm transportation service from three Rockies hubs to four Midcontinent delivery points on or about Dec. 15 (see Daily GPI, Nov. 16), now is cautioning firm shippers not to bet the farm on that occurring. A mid-December startup of service on the REX West segment would be about two weeks ahead of schedule. However, REX said in a clarification Monday that for the interim service to become available Dec. 15, “significant work needs to yet be accomplished to provide such service. While service to the listed delivery points may be available on this date, shippers are advised that structuring business transactions for the month of December effective on December 15 is subject to this significant work being accomplished by December 15, and therefore these transactions are subject to significant risk of nonperformance.”

Although Rockies prices have still been subject to occasional major weakness in recent weeks, REX has been helping support the regional market by making purchases of purge and linepack gas since mid-October. It said that from time to time it may also buy and sell gas to facilitate the testing of its new compressor stations. Several purchases have been posted on the REX bulletin board, including amount, price and supplier.

Brian Jeffries, executive director of the Wyoming Pipeline Authority, at the beginning of November answered a producer’s question about how much gas the REX linepack purchases would involve by saying in an e-mail, “Linepack at 1,200 psi would be roughly 3 Bcf. If filled over 60 days, that would be roughly 50,000 Mcf per day. As a market demand, it is significant but not overwhelming.

“To put the number in some further perspective, a one-degree change in the average daily winter temperature in Denver and Salt Lake City…changes combined gas demand in those markets by approximately 11,000 Mcf per day. So the effect on the market [of the estimated REX purchases] is about the same as the difference of 5 degrees in the average of the high and low temperature for a given day.”

The producer told NGI Tuesday that “REX won’t say when they are buying the linepack gas or where, other than that they will buy it at different times, both in the Rockies and the Midcontinent. [Tuesday’s] jump in Rockies prices could be due to cold weather moving into Denver. It was 75 here yesterday but only about 30 now. There is plenty of pipeline capacity to move gas south out of Wyoming, so when we get cold weather along the Front Range, Wyoming gas prices typically go up. It’s the east-west pipes that get full and cause price weakness.”

About 850 MMcf/d of Gulf of Mexico production will be missing for the next couple of days after the Independence Hub platform shut down Tuesday for routine maintenance, according to the hub’s majority owner, Enterprise Products Partners (see related story).

“Oh, yeah!” a Texas-based marketer exclaimed when asked if the market will see lower prices again Wednesday. He noted that after a 31-cent drop in the open-outcry session Tuesday, December natural gas futures were going still lower in after-hours activity despite a new record-setting daily settlement at $98.03/bbl by the prompt-month crude oil contract.

Also, the marketer didn’t think there is going to be enough cold weather in northern market areas to support a rally, and he noted that the demand loss over a four-day holiday weekend will be even greater than for a three-day weekend. According to his company’s forecaster, the highs Thursday will be 56 in Boston and 61 in New York City, although the two cities are expected to have freezing lows on Friday. Those kind of highs won’t support the heating load needed for a rebound, he said.

Referring to the contrast in price direction between the Midcontinent and Midwest, the marketer said a lot of gas was being kept home in the Midcontinent to handle freezing low temperatures. Meanwhile, the market area is still amply supplied with all of its pipeline delivery options, he said.

Although local weather would keep getting colder past Thanksgiving Day, a Midwestern marketer said a forecasting service had told her company that the U.S. intermediate-term weather map “was not as ‘blue’ [meaning below-normal temperatures] as before all the way through early December.” She bought a package at the Consumers Energy citygate for $7.00 Tuesday despite the company having more gas than it needs at present. “But we had to move some supplies around to accommodate one customer’s request” for extra gas, she said.

©Copyright 2007Intelligence 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.