The early-week bear market that resulted primarily from forecasts of a midweek break from harsh winter weather in some areas proved to be short-lived, at least in eastern markets. Prices rebounded from about a nickel to nearly 30 cents Wednesday at most points in the East as arctic air masses were predicted to bring sub-zero wind chills to the Midwest and Plains states Thursday and continue on into the Northeast and much of the South.

Several eastern points joined most of the West in recording either flat numbers or mostly small losses that nevertheless ran as high as half a dollar. Western temperatures were expected to remain normal to above normal Thursday.

Several pipes were reintroducing capacity constraints in response to the return of colder weather (see Transportation Notes).

Florida Gas Zone 3 saw one of the largest gains as freezing weather was expected again in the northern Florida market area by Thursday evening.

Chances for moderate eastern firmness to continue Thursday were considered good in light of forecasts for continued cold Friday and January futures ending a four-day dive by posting a gain of 4.2 cents Wednesday. The West’s relatively moderate temperatures for early December, combined with excess linepack issues and capacity constraints on some pipes, made it likely that softness would continue to dominate that region.

Price movement beyond Thursday, though, was something of a heads-or-tails coin flip call with warming trends expected to resume over the weekend in the East and nearly all of the U.S. expected to see above normal temperatures throughout next week. Also, expectations of a storage withdrawal report much lower than the comparable year-ago and five-year average figures (see futures story), along with the weekend’s usual slump of industrial demand, tended to make declines a bit more likely Friday.

Although he perceived “very light trading” Wednesday, a Midcontinent producer supported the case for further eastern gains Thursday by noting that Wednesday’s cash prices were “rising a little bit” in late deals. However, he said he was still seeing a lot of storage holders under mandatory withdrawal ratchets trying to sell the gas rather than use it themselves.

The producer said liquidity seemed to be very low at almost every point he trades. That was hard to understand, he said, because “most people who need to sell their gas” realize that they’d better do it now rather than later when above normal temperatures result in very weak demand next week.

A marketer in the Upper Midwest said her area was enduring some frigid conditions Wednesday that would get even worse Thursday, but on the horizon was an air mass with above-average temperatures coming south from Canada by the start of next week. Thermometer readings are in the teens and 20s for now, she said, so all buyers could do is “just wait for warmer weather to get here again.”

Ron Denhardt of Winchester, MA-based Strategic Energy & Economic Research expects a storage withdrawal of 8 Bcf to be reported for the week ending Dec. 1. That’s less than the average pull of 15 Bcf expected by 20 industry players in the weekly survey by Reuters news service. Withdrawal estimates ranged from 5 Bcf to 33 Bcf, Reuters said.

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