The price picture looked pretty bleak for bullish types earlierthis week, but they were taking heart Wednesday from a cashrebound, further strength in futures and signs that winter weatherlikely will return for a new siege, just as the groundhog predictedlast Friday. Most eastern gains tended to be in the teens, but mostwestern points rose by 20 cents or more, with the PG&E citygate(up almost $1.50) as the leader of the pack.

A winter storm already was developing from the Upper Midwestwestward across the northern half of the U.S. Bulls got additionalencouragement from the latest six- to 10-day forecast from theNational Weather Service, which pushed expectations for abovenormal temperatures into the extreme Southeastern corner of thenation. NWS predicted below normal readings west of a line runningfrom Wisconsin through central Texas.

Depending on whom you ask, AGA’s report of 105 Bcf beingwithdrawn from storage last week was high, low or just about rightcompared with prior expectations. Regardless, Nymex numbers surgedafterward, leaving cash traders with a feeling of support forcontinued upticks in their market today. A marketer reportedalready seeing $6.20 Henry Hub pricing for Friday, reflecting aclose match with Wednesday’s screen move. The March contracts forheating oil and crude oil futures also made strong gains Wednesday.

The marketer said he also had seen more storage injection demandemerging with prices substantially under index, “but now that we’restarting to approach index levels again that demand may startfading again.” He considered it “absolutely amazing where themarket has gone since this time last year.”

Midcontinent prices were strong in response to the market areastorm buildup, a large aggregator said. He noted that PanhandleEastern and ANR Southwest traded slightly higher than Henry HubWednesday, and Northern Natural’s demarc and Ventura points werenearly 20 cents above the Hub.

A trader on Northwest applauded the news that FERC had approvedthe pipeline’s request to deploy temporary compression that willboost northbound volumes through the Kemmerer Station bottleneck inWyoming (see related story in this issue). That will allow at least20 MMcf/d or more of gas to go north from Northwest’s south end, hesaid, “and keep them from having to issue so many OFOs.” ANorthwest spokeswoman said the pipeline already had the extracompression ready to go in anticipation of FERC’s OK and expectedit to be in operation today.

©Copyright 2001 Intelligence Press Inc. All rights reserved. Thepreceding news report may not be republished or redistributed, inwhole or in part, in any form, without prior written consent ofIntelligence Press, Inc.