Prices continued to recede along with severe winter weather Wednesday. The declines also continued to grow more consistent across geographical lines. With the exception of a plunge of more than 40 cents at the Florida citygate (which still left it the market’s most expensive point), virtually all other points fell between about a nickel and 15 cents.

Flatness at Dawn was the primary exception to moderate softness. Dawn’s resistance to the overall downturn likely was due to freezing weather remaining in western Ontario.

It’s official: the parade of OFOs and similar actions generated by the recent siege of winter weather is over. Florida Gas and PG&E ended the last significant OFO-like constraints remaining (see Transportation Notes).

April futures again provided no clues for cash by trading near flat during the morning, but they jumped sharply and settled up just shy of a dime after AGA reported 132 Bcf in storage withdrawals last week. The volume was in line with many prior expectations, although some people had been guessing as much as 160 Bcf.

The storage report and Nymex reaction caused sources to have differing opinions on whether a price rally is possible today. A Gulf Coast marketer expects flat to slightly higher cash numbers today in an attempt to follow the screen. He noted that Henry Hub physical gas remained at a premium to the screen Wednesday even with cold weather largely backed off (he referred to futures while cash was still trading during the morning and not counting the afternoon uptick that carried futures above the Hub). But the Hub premium retreated to about a nickel, down from 15 cents Tuesday, he said. The marketer also reported Henry Hub swing swaps for the rest of the month had been 6 cents over the screen Tuesday but were just 2 cents up yesterday.

However, a couple of other traders said they believe the downturn in weather-related gas load will be too much for Nymex support to overcome and are expecting softening to continue. Outside of frigid conditions lingering or due again in states near the Canadian border, “there’s no weather to support prices across the nation,” said a utility buyer in the Midwest.

A producer occupied more neutral ground, saying, “With AGA and Nymex pushing prices up and weather dwindling (sic) them down, we will see who is stronger tomorrow.”

CIG and Cheyenne Hub were the only points with sub-$2 quotes Wednesday. A Rockies marketer explained that they are the largest suppliers to the rapidly warming Denver metropolitan area and thus the most weather-sensitive points in the Rockies. “The [Cheyenne] Hub and CIG don’t generally have as many market options” as other pipes in the region, he said.

A Michigan citygate trader said MichCon started very low in the mid to high $2.40s but ended up around $2.59, while Consumers Power was in the $2.50s all along. MichCon traders seemed to expect weakness from the outset but didn’t find as much as they had thought, he said. Perhaps because of the state’s abundance of storage, he was seeing a bit of citygate price weakness looming this summer. Basis for the April-October strip plus 7 cents for MichCon and plus 8 cents for Consumers, while basis for April alone is plus 9 and 10 cents respectively, he said.

Tennessee did not anticipate any service restrictions from a rupture about 3:30 a.m. CST Wednesday near Main Line Valve 107 (North Means, KY). The rupture occurred outside a compressor station and caused a fire that burned until early afternoon but no injuries, a spokeswoman said. Five lines come out of the station, but none were running full at the time. As a precaution, Tennessee shut down a line adjacent to the one that ruptured, leaving three lines to continue service.

“With prices above first-of-month indexes and little or no demand load, we are happily sellers in the swing market,” said a Midwestern LDC buyer. “If prices dip below index, we can sell back to our supplier at a predetermined rate.”

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