Sorry to sound like a broken record, but Thursday’s marketcontinued the pattern set Tuesday and Wednesday: ever-higher pricepeaks in the frigid Northeast (the top quote was $19 at TranscoZone 6-NYC) and considerably smaller but still strong increaseselsewhere.

The Northeast market was so hectic that three points (Algonquincitygates and both the New York City and non-NYC pools of Transco’sZone 6) recorded average gains exceeding $6. Most quotes for thearea were in even-dollar amounts. “After all, you don’t quibbleover pennies at these levels,” commented one trader.

“There’s nothing new in the Northeast situation, it’s the sameold thing as before — very heavy demand from freezing weather andrestricted transport capacity,” a marketer said. Area utilitieswould love to sell gas at these levels if they could, she went on,but everybody needs it for their own burns. All the Northeast LDCsthat she knew of have shut off their interruptible customers.

The high demand is compounded by people not being used to severeweather in the winter after so many mild ones, according to anaggregator. Another factor is Maritimes & Northeast Pipelinenot coming on-line as expected, she said. Because M&N coulddeliver some gas into New England downstream of the Cromwell, CT,bottleneck on Algonquin, it would have alleviated some of thetightness of supply, she said.

Despite the $19 high quote for Transco Zone 6-NYC, a marketersaid it looked like the point was retreating rather quickly afterstarting around $15 and spiking to the $18 peak she was aware of.

Meanwhile, “back in the not so spectacular Gulf Coast, pricesaren’t skyrocketing like in the Northeast but are still respectablenonetheless,” a Houston trader said. Gulf numbers had anup-down-up-down experience, but the ups were greater than the downsand created an overall upward trend, he said.

Gains of about a dime or more were consistently spreadthroughout the non-Northeast market. Mid to high $2.30s prices inthe Southwest basins were relatively strong to the Californiaborder around $2.50 because a lot of basin gas was flowing northand east to more lucrative markets than west to California,according to a marketer.

The cold in western Canada caused intra-Alberta numbers to go upmore than a dime to the C$3.10 area and Westcoast Station 2 tosurpass that around C$3.20, a couple of traders said. Station 2pricing is keeping supplies tight at Sumas, one said.

Although the National Weather Service, in its latest six- to10-day forecast Wednesday, again projected above normaltemperatures for the East next week, several sources said they arehearing forecasts to the contrary. Based on cash results and thescreen’s gain of more than 14 cents Thursday, “the market appearsto have sided with the private forecasters who are calling forprolonged cold,” a trader concluded.

Although crude oil futures traded down for a while Thursday,they ended the day with a 12-cent gain to $29.66/bbl that left themjust 34 cents shy of $30. Heating oil also rose again, but atcurrent Northeast prices for gas, fuel oil is still cheaper at theburnertip there, said a marketer.

If the weather stays cold through the end of the month as someforecasters suggest, it will be a very interesting Februarybidweek, one source feels. There is always the chance that priceswill crater in the February aftermarket “if and when” the coldsubsides, he said. “But after so many people got burned in Januaryby being short, you wonder who will roll the dice again.”

A Gulf Coast trader said he had sold an ANR Southeast packagefor February at basis of minus 4.75 earlier this week, but believedit had firmed to minus 4.25 Thursday. Another source reportingphysical basis for Transco Zone 6-NYC at plus 200 said basis wasmoving higher for both February and March.

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