St. Patrick’s Day will be warm and mostly dry in the U.S., according to The Weather Channel (TWC). That sounded like as good a reason as any for gas prices to drop at nearly all points Monday, although the previous Friday’s 6.3-cent decline by April futures also contributed to the cash market softness.

Only three flat to about a nickel higher Southwest points avoided the overall losses. Otherwise quotes recorded losses ranging from 2-3 cents to about half a dollar. Many of the largest declines were concentrated in the Midcontinent and East Texas markets.

Freezing forecasts are getting scarcer day by day outside Western Canada, mountainous sections of the West and some parts of the Midwest and Northeast along the Canadian border. Although spring doesn’t make its official debut until Friday, many areas have already gotten a jump on spring-like weather ahead of time.

And very cold weather doesn’t guarantee price strength. Although Alberta is one of the last remaining bastions of frigid condition, with lows in the mid single digits and upper teens forecast for Tuesday in Edmonton and Calgary, respectively, NOVA Inventory Transfer numbers still fell nearly C15 cents.

Some areas are even starting to feel a bit summery already. This is especially so in the south-central section of the U.S., where temperatures are expected to peak around 80 Tuesday from Houston through the Dallas-Fort Worth Metroplex to Oklahoma City.

MRT is issuing a warm weather-related System Protection Warning for the second time in two weeks (see Transportation Notes). Otherwise pipeline constraints remain largely insignificant.

Despite the mild forecasts, a Texas-based marketer said his company was not encountering any problem yet in getting its daily supplies sold. “Depending on where you are, we still have a little bit of heating load left,” he added.

The marketer said he believes the analysts who say the market is going to get to sub-$3 futures and Henry Hub pricing by the end of the summer (see related story). He said he supposed the possibility of avoiding a “meltdown” will depend on how much producers are willing to shut in before storage injections no longer remain an option.

Noting that quite a few trading points in the Rockies and Midcontinent are already averaging well below $3, a producer said the mantra for 2009 in the Rockies is “batten down the hedges.” Some producers whose extraction costs are as low as $1.50/Mcf or so might be willing to allow prices to get that low before shutting in, he added. Personally he was enjoying the forecast for a Denver-area peak in the low to mid 70s Tuesday but from the business point of view it wasn’t so nice, he added.

However, there’s likely to be some sharing of the price misery, the producer continued. It’s going to be “curtains” for Henry Hub pricing pretty soon, as he looks for the hub to start seeing CenterPoint-type numbers (CenterPoint has often seen some of the market’s lowest pricing in recent months). Midcontinent Express should be starting up sometime next month and will add about 1.4 Bcf/d of shale gas production competition to Henry Hub along its route from Oklahoma to Alabama (see Daily GPI, Oct. 11, 2007), he said. And while a more minor challenge, Rockies Express (REX) should be adding about 100 MMcf/d of extra gas into the Gulf Coast battle for market share when it begins interim REX-East service around mid-April (see Daily GPI, March 13), the producer noted.

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