The February aftermarket got off to a fairly strong start Thursday with swing quotes up a few cents from end-of-January levels in most cases and generally about 15-20 cents ahead of apparent monthly indexes.

The return of normal to severe winter weather in Western Canada and throughout most of the U.S. outside the Southeast, along with a gain of a little more than a nickel in March futures, were cited as contributing to the cash firmness. But an eastern dual-utility buyer perceived that a lot of marketers were entering the month with short supply positions in anticipation of weaker incremental numbers, and their short-covering purchases had contributed substantially to the early price surge.

However, the utility buyer and other sources couldn’t see the upticks lasting. A downtrend could begin as early as today, they said, but if the weekend market manages to hold up somehow, lower prices are almost certainly due next week.

As if to emphasize that outlook, the National Weather Service said Thursday that for the Feb. 6-10 period, its forecast map (not counting Alaska) has nary a bit of blue indicating below normal temperatures in the Lower 48 states. Instead, an inverted triangle stretching from the Idaho-Washington border down into central Texas and then back up into the lower Northeast is full of above normal predictions that include the key Midwest and Northeast market areas. Meanwhile, the Southeast and most of the West should see normal mercury levels, NWS said.

A Calgary-based producer said the aftermarket was up “because we’re finally getting some market-area weather.” However, she and another trader in the city reported that heavy snow and frigid temperatures that have plagued the area since late last week had let up, and a thawing out period would begin by today.

A marketer said that despite Kansas, Missouri and parts of Oklahoma enduring icy conditions this week, he had gotten no reports of wellhead freeze-offs in the Midcontinent. He went on to comment that with so much gas remaining in storage, “I can’t see any reason at all for prices to higher” no matter what happens weather-wise.

A western trader agreed that moderating weather over the next few days should take back any recent price advances, “unless of course the Nymex has a mind of its own.”

This week’s cold weather in many areas was severe enough for PG&E to record one of its largest gas sendouts on Tuesday. The utility distributed 3.95 Bcf that day, which was 350 MMcf short of the 4.3 Bcf record set Dec. 23, 1998, a spokeswoman said. Tuesday’s volume wasn’t the second highest, since PG&E has had several sendouts approaching the 1998 record since then, “but this indicates there was huge weather demand for us this week.” On a typical January day the average temperature in PG&E’s service territory would be 49 degrees, which would equate to a sendout of about 3.4 Bcf/d, she said. Energy conservation spurred by the ultrahigh gas and power prices a year ago “has been a big factor in affording us a comfortable cushion” against straining total delivery capacity, she said.

One trader observed that any potential spike in California prices due to the recent frigid weather was blunted by huge storage withdrawals by both PG&E and SoCalGas. It seems the big increases in residential and commercial heating loads this week were largely absorbed by the utilities’ storage use, he said. But with SoCalGas system storage still 65% full (compared to the typical 40% at this time of year), there is no threat of the state running out of gas, the trader said. That will continue to limit upside potential for California prices.

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