With heating load starting to fade a bit in northern market areas and having nearly disappeared in the South, the cash market saw mixed pricing Thursday that included many flat points and leaned to the downside in a majority of cases. Because of colder weather than expected and linepack shortfalls in some instances, the Rockies continued to be much stronger than the overall market, but Thursday's gains were considerably smaller than those on Wednesday.

Price movement ranged from flat to about $1.75 higher or to about 45 cents lower. Most of the losses were small, but Northeast citygates recorded most of the double-digit declines. Even with Thursday's general softness, all points continued to trade at substantial premiums to first-of-month indexes; the heftiest premiums of $3-plus are in the Rockies (naturally), while several other western and Midcontinent points were trading at more than a dollar over index.

Rockies numbers, which had slumped to averages of less than $3 Monday for the second time in a week, are now starting to rival Midcontinent pricing at $7-plus in some cases. What's more, Sumas commanded a premium of slightly more than $4 over Northwest-domestic Monday, but Thursday the domestic product trailed by only about 20 cents.

Westcoast provided another indication that former issues with excess western supplies had turned around by changing its imbalance tolerances to encourage packing and discourage drafting (see Transportation Notes). And Kern River said "critically low linepack" on its system caused it to cut capacity at the Veyo Compressor Station to 1,950,000 Dth/d Thursday until further notice.

CIG mentioned the possibility of wellhead freeze-offs, saying a "winter storm is predicted that will affect our supply and market regions Thursday and Friday...this week." It said point operators were expected "to maintain their confirmed quantities at levels supported by actual flow rates, including any anticipated freeze-offs or other events that could limit supply reliability. Locations that are unable to maintain flow rates at scheduled levels may be subject to underperformance caps during the scheduling process."

With their prices currently riding so high, Rockies producers may not care about it now, but they will get a little break when Questar reopens its Clay Basin storage facility for normal nominations a day earlier than expected next Wednesday (see Transportation Notes).

The Energy Information Administration storage report came in within the range of expectations but a little higher than consensus estimates in reporting a 23 Bcf storage increase for the week ending April 6. At least one Nymex trader dismissed the weekly storage reports as overrated in their market influence (see futures story); nevertheless, the May natural gas contract got pushed 6.9 cents higher, at least partially due to major strength in oil markets as crude oil futures soared nearly $2/bbl in response to questions about OPEC production levels and extended outages or partial outages at U.S. refineries in recent weeks.

Due to the cold weather that has infused most of the East and northern sections of the West this week, the next report is widely expected to reflect a rare withdrawal during the traditional injection season.

Look for this unusual April weather to continue, advises Weather 2000. Noting that last week Chicago enjoyed 70-degree weather and New York City hit 63, the consulting firm said this "historic" second week of April has featured one of the coldest Easter Sundays in U.S. history, record hard freezes reaching as far as the deep South, and a winter storm that dumped a half-foot of snow across parts of Illinois, Wisconsin and Michigan. As of Thursday roughly 25% of the Lower 48 states was covered in snow or ice on a date that typically sees only a small percentage of the nation with snowpack.

"We continue to caution that a substantial winter Nor'easter should develop and track up the East Coast in a few days helping to establish a chilly [third] week of April as well, from the Mississippi River to the Atlantic," Weather 2000 said. "Eventually this month, the weather will psychologically transform from 'wintry cold' to 'spring cool,' but no extended periods of warmer-than-normal weather appear on the horizon across the East for the balance of April 2007.

"Conversely, several portions of the western and southwestern U.S. are not only yielding impressive positive temperature anomalies this month...but also significant heat and cooling degree days both in March and now April [both Phoenix and Las Vegas have accumulated over 100 CDDs in the first nine days of April]. This rare combination of northern cold and southwestern warmth is establishing very unusual net national energy demand for the month of April."

Despite a Chicago citygate drop of a little more than a dime, it still seemed like a fairly strong market to a Western Canada producer, who noted that Chicago had risen 35 cents the day before. "Nymex also is hanging tough," he pointed out. It was still freezing Thursday in the Calgary area but a warm-up is due soon that might push temperatures into the 50s or maybe even 60s, he said. He expects cash prices to be "just a little bit softer" Friday, noting that the weekend factor would come into play but the physical market would have modest prior-day screen support.

A marketer in the Upper Midwest said her city had overnight snowfall, but that had turned to rain Thursday. Local temperatures are expected to get up into the 50s by late next week, she said.

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