Prices were down nearly across the board Wednesday, even with a potent winter storm having occupied the Pacific Northwest/Rockies region and a new mass of arctic air from Canada bearing down on the Midwest and eventually the Northeast. However, much of the rest of the market was staying fairly moderate for late February, and the Northeast would get slightly warmer Wednesday before starting to see snow shows as the weekend got nearer.

A couple of flat averages in the U.S. combined with gains from nearly a dime to about 20 cents at Sumas, Emerson and the three Western Canada price points to avoid the overall softening. Losses ranged from about a nickel to nearly $4.95. All of the triple-digit plunges occurred at some of the Northeast locations; again, Texas Eastern M-3 and the non-New York pool of Transco Zone 6 were out of step with the rest of their regional citygate brethren in rising only a little more than 75 cents and nearly 90 cents, respectively. Other declines topped off at a little less than 40 cents.

Any impact that TransCanada's weekend mainline rupture may have had on Northeast price spikes Tuesday must have been largely psychological. TransCanada said it was still moving 1.8 Bcf/d through the only one of three lines still in service in the impacted area, while pre-break activity had ranged from 2.1 Bcf/d to 2.9 Bcf/d when all three lines were in operation (see Transportation Notes). A source said that since Tuesday flows had been covered in Friday's pre-holiday trading, some IT supplies scheduled into the Northeast via TransCanada undoubtedly weren't being delivered Tuesday and thus required buyers to purchase extra imbalance makeup gas that day.

It was obvious that Iroquois Zone 2 was making up for any supplies that had been scheduled for Tuesday via TransCanada but didn't arrive. Although the point still saw a top quote of $15 Wednesday, its average dropped about $4.20 into the mid $10.40s, IntercontinentalExchange (ICE) reported, while its volumes on the ICE platform jumped from 92,100 MMBtu Tuesday to 141,900 MMBtu Wednesday.

An impending return of bitter cold to the northern market areas from the Upper Plains through the Northeast "has reminded many people that it is still only February," said an AccuWeather.com advisory Wednesday. The forecasting service's Paul Pastelok also said it appears that more storms and shots of cold will hit the same areas mainly north of Interstate 70 through the first seven to 10 days of March.

Indicative of the colder weather returning to the Upper Midwest, Northern Natural Gas will initiate System Overrun Limitations in all market-area zones Thursday (see Transportation Notes).

Meanwhile, most of the southern half of the U.S. outside the southern Rockies will continue to experience light heating load for a while longer.

Continuing turmoil in the Middle East and North Africa propelled the UK and U.S. benchmark crude oil prices to even greater heights, yet the U.S. gas market still seemed oblivious to what was going on globally with a primary fuel competitor.

March futures spent much of Wednesday in the red before finally climbing into positive territory that afternoon, closing out with a gain of 3.3 cents (see related story).

ICE said there was almost no change from Tuesday to Wednesday in bidweek trading at the Chicago citygate, where the Tuesday average of about $3.98 fell only about a penny and a half. It was much the same at the Southern California border, according to ICE, as the Wednesday average just over $3.83 was less than a penny lower than prior-day quotes.

Tim Evans of Citi Futures Perspective looks a 67 Bcf storage withdrawal being reported for the week ending Feb. 18, to be followed by draws of 94 Bcf, 97 Bcf and 78 Bcf in the weeks ending Feb. 25, March 4 and March 11, respectively. Canaccord Genuity analysts say they anticipate a pull around 90 Bcf in Thursday morning's Energy Information Administration announcement. And IAF Advisors analyst Kyle Cooper said his estimate is 84 Bcf.

Hugh Li and Stefan Revielle of Credit Suisse predict an 82 Bcf draw, noting that cumulative heating degree days (HDD) fell by 88, or 40%, to 136 HDD for the week ending Feb. 18 as milder temperatures blanketed much of the U.S., well below the 10-year average demand and last year's HDD number for the week. Interestingly, said the duo, in reacting to the warmer weather a few of the storage facilities that they track posted week-on-week injections for the first time this season.

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