As traders had anticipated Friday, a holiday weekend blast of winter weather that managed to bring freezing rain and snow into parts of the South was too short and not severe enough to keep prices rising Tuesday. Instead, dollar-plus losses at several Northeast citygates led overall softening that yielded non-Northeast declines ranging from a dime or so in the Pacific Northwest to 40 cents.

Forecasts of the weekend frigidity temporarily stifled last week’s debate over whether the winter heating season had ended for all practical purposes, but the discussion resumed again Tuesday. “We’d like to think winter is pretty much over, but I guess we’ll have to wait until March to be sure,” said a Northeast marketer.

The region got another blast of arctic cold over the weekend, he said, “but it’s started warming up again and it looks like we’ll be seeing highs in the 40s” from midweek into the weekend. Friday’s rally jazzed up a previously dull market by not being entirely anticipated, especially the strength of the Northeast spikes, but things were getting quieter again Tuesday, the marketer said. “It seemed like lot of traders were still trying to wake up from their long holiday weekend.”

According to a Gulf Coast trader, “most people up north will tell you they hope that weekend shot represented the end of their winter,” but they are reluctant to call it a certainty. Unless EIA comes along with anything to shake things up again, he expects to see a quiet market week with gradually declining prices.

A marketer in the Midwest offered a supportive comment, saying, “I’m always afraid to say winter is over this early.” But he acknowledged that Tuesday’s much sunnier and warmer conditions were lifting Midwesterners’ spirits; “they’re really anxious for winter to end. It certainly is a lot nicer [Tuesday] than what we had over the weekend.”

Weather 2000 continued to offer some encouragement to bullish traders who haven’t given up on chances for winter weather to re-energize gas prices. A “silly but frustrating pattern continues,” the New York City-based consulting firm said in Tuesday’s advisory.

“Winter written off in November only to be followed by three of the snowiest, chilliest weeks of December seen in decades; winter written off around Christmas only to be followed by one of the most frigid Januarys in a half-century; and finally, winter written off at the end of January only to have three-quarters of the entire nation immersed in polar air and half the nation blanketed with snow-cover. Eventually (April 1st?), repeated calls for the end of winter will become reality, but until then, prepare for unbelievable national HDD [heating degree day] stats to come in for February 2004 and a March to knock your socks off as well.”

Transport issues are fairly negligible now that Northern Natural Gas has lifted the last remaining OFO-like restriction (see Transportation Notes), but Florida Gas Transmission was warning market-area customers Monday of a potential Overage Alert Day notice. That wasn’t surprising since’s it’s cold and damp in the Sunshine State for a change, said a utility buyer reporting production-area purchases in FGT’s Zone 2 in the mid $5.40s and a citygate sale in the high $5.60s. However, another Florida utility buyer said one of her company’s power generation units had gone down unexpectedly, so they were shedding gas for Wednesday rather than buying new supplies.

Sure, prices were down Tuesday, but the West was fairly strong compared to other markets, said a regional utility buyer, citing a forecast of a new winter storm in some mountainous areas. The Weather Channel confirmed that heavy snow was expected to move southward through the Sierras along with a cold front, dropping mountain snow levels to 5,500-6,000 feet by the end of Wednesday. However, from “Montana southward to New Mexico and Arizona, temperatures will be above seasonal means,” TWC said.

Saying last week was about 7% colder than normal, Lehman Brothers analyst Thomas Driscoll anticipates a storage withdrawal of 170 Bcf to be announced Thursday for the week ending Feb. 13. Assuming his estimate is correct, Driscoll added, the storage surplus versus a year ago will increase from 232 Bcf to 265 Bcf and the variance versus five-year averages would rise from a 38 Bcf deficit to a 93 Bcf deficit.

After initially estimating a 150-160 Bcf pull in the upcoming storage report, Citigroup’s Kyle Cooper said Tuesday he had raised his final estimation to 160-170 Bcf “due to some additional pipeline data. However, after recent reports, we clearly have little confidence in this estimation.”

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