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Most Points Up as Cold Spell Reasserts Influence

With snowfall in the north-central U.S. expected to continue at least into Saturday and forecasts of lows in the 30s being common from the Midwest through the Rockies, prices rebounded Friday at nearly all locations after mild softness a day earlier had interrupted last week's overall gains. Thursday's 7.1-cent screen advance provided additional support for cash pricing, and the usual weekend slump of industrial load apparently had little impact.

Several instances of flat pricing accompanied gains ranging from 2-3 cents to about 15 cents. Few of the increases got above single digits.

Monday's cash trading will have essentially neutral futures guidance after the May contract wavered on either side of flat before finishing Friday down 0.8 cent (see related story).

The cooler weather in the Northeast and the Midwest was seeping into much of the eastern half of the South, with Friday's highs in the mid 70s forecast to decline into the upper 60s Saturday in both Atlanta and Birmingham, AL. That will tend to depress any budding cooling load in that area temporarily. However, air conditioners would keep running in Florida and Texas, where Saturday's peak temperatures were expected to range from either side of 80 to the upper 80s.

Blizzard-like conditions were causing significant traffic problems late Thursday and Friday in the western halves of the Dakotas and Nebraska, extending into northwest Kansas and eastern Wyoming. And The Weather Channel said wet snow would spread from there slowly eastward towards the northern Great Lakes area late Friday into Saturday.

Weekend forecasts called for falling temperatures in the Northeast, while most of the Midwest would see relatively little change but remain in the cold to chilly area.

Most western quotes participated in the overall advance despite warming trends in the Rockies that would take Denver-area highs into the mid 60s Saturday. Bottom-end temperatures at such Western Canada locations as Winnipeg, Calgary and Edmonton were expected to remain well below the freezing level, according to Madison, WI-based Weather Central.

It's looking increasingly like substantial eastern cooling load will be impacting the market from the middle of this week through the weekend. The National Weather Service (NWS) forecast for the April 20-24 period calls for above-normal temperatures everywhere east of a line from far West Texas to Michigan's Upper Peninsula, with the greatest deviations above normal occurring east and south of a line from southwest Louisiana through nearly all of Pennsylvania into the New York City area. NWS also predicted above-normal readings in the coastal half of California from north of San Francisco Bay to the Mexican border. It expects below-normal conditions north of an arc extending from eastern Washington state into northern Colorado before turning upward into northwest Minnesota.

Tennessee, which planned to implement a systemwide Imbalance Warning Saturday to avoid excess linepack (see Transportation Notes), nevertheless recorded gains of about a nickel or slightly higher in the Gulf Coast production area.

Although both Texas Eastern M-3 and Transco's Zone 6-New York pool were flat to up a penny or so, their trading volumes took sizeable hits on the IntercontinentalExchange (ICE) online platform. M-3 dropped from 571,000 MMBtu Thursday to 462,800 MMBtu Friday, while the Zone 6 point went from 198,600 MMBtu to 147,700 MMBtu.

Meanwhile, Henry Hub rose nearly a dime, but its ICE activity plummeted from 895,500 MMBtu to 749,200 MMBtu.

A Rockies producer noted that the CIG-Henry Hub basis spread, which got as tight as 18 cents Tuesday, had more than doubled to about 42 cents Friday. CIG was among the day's flat points, and the producer said abundant hydropower supplies are starting to enter western markets, which is limiting any potential strength in regional gas prices. And there's still some snow in California's mountain areas that hasn't begun to melt yet, he said.

The ongoing testing shut-in of Questar's Clay Basin storage facility is another bearish factor, he added, but Rockies prices should get some relief when Clay Basin is scheduled to resume normal operations Thursday (see Daily GPI, March 11) and give producers an extra outlet in finding a home for their supplies. Snow fell in the Denver area Thursday, he said, and although temperatures will be edging up into the 60s during the weekend, overnight lows are due to remain in the 30s.

It's definitely cooler in Oklahoma with highs falling into the mid to upper 60s Friday and Saturday after having approached 90 as recently as Thursday, an area producer said, but the cooldown would be short-lived with warmer conditions returning by the end of the weekend. That helped OGT prices eke out a small increase, he added. Prices started near the low end of their ranges and gradually rose during the morning before reversing to the downside a bit near the close of trading, he said.

The producer said he perceived storage purchases as getting stronger every Friday lately, which he guessed was due to buyers seeing the weekends as their best opportunities for injections.

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