“We’re tough up this way; we don’t need heat,” a Midwest source jested as a way of trying to explain Thursday’s falling prices despite subfreezing temperatures across most of the region that would extend into the weekend. Quotes fell across the board, with losses ranging from a little more than a dime at some western points to about a half a dollar for New York City deliveries.

Weather fundamentals appeared to be somewhat supportive of prices, but the actual price numbers said otherwise. Cold and wet to snowy conditions were in the forecasts from the northern Rockies through the Upper Plains and Midwest through the Northeast, and even the eastern sections of the South could expect some serious furnace activity over the next couple of days. However, a Texas-based source noted that a hard freeze that had been expected to enter the state apparently wasn’t going to materialize after all.

The biggest storage withdrawal so far in this heating season failed to generate any bullish sentiment. The Energy Information Administration managed to exceed expectations for the second straight week with its estimate of a 236 Bcf pull for the week ending Jan. 30, but the screen showed its disdain with a daily loss of more than a quarter.

Everybody was expecting a big withdrawal anyway, said a Midcontinent marketer, and this late in the season it didn’t have as much impact as it would have before January. “Most people can’t keep their storage in the ground much longer,” he said. He expects to see at least a small rally in futures Friday primarily because of the screen’s unusual discount to Henry Hub cash currently. But cash likely will continue to mirror the previous-day screen, so that and the typical weekend factor of lower industrial demand likely will keep physical prices on the decline Friday, the marketer said.

“Actually there’s some decent demand,” a Midwest trader said, but the utilities haven’t seen enough weather to make them buy any more spot gas. “They’re comfortable with storage and peaking deals already in place.” As much as 10 more inches of snow could arrive in his city through Friday, he said, and noting the local area’s mostly flat terrain, quipped, “Maybe we could pile up our snow into a mountain and make a ski resort.”

A Gulf Coast marketer found it hard to say why prices fell with colder weather coming up in northern market areas. “You can’t really blame it on following the screen,” not after Wednesday’s teeny gain of 0.3 cents, he said. He and a couple of other sources agreed that the market has gotten very quiet lately after a prolonged period of cold-weather volatility, which he thought some traders would welcome as a break from stress. Another trader begged to differ, though, saying, “Put me down as one that likes volatility.”

Despite the big draw announced by EIA, a Midcontinent/Southwest marketer said the market was “still way ahead” on storage inventories, “so I figure that’s why Nymex went down.” Give it another month or so, she added, “and we’ll see how good the groundhog’s weather predicting skills are.”

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