The end of winter is still a couple of weeks away on the calendar, and the season’s physical existence is still very much in evidence in the Northeast and Midwest and to some extent in northerly sections of the South. Strong heating load in much of the East had prices on the rise Tuesday at all points and the continuation of cold weather is expected to combine with major gains in energy futures Tuesday to extend cash market firmness Wednesday.

To no one’s surprise, frigid Northeast citygates led the price trek higher Tuesday with gains that ran as high as about 70 cents at three New England points. Other upticks were more modest in ranging from a little more than a nickel to a quarter. Befitting its status as the region with the most mild weather currently, the West recorded the lion’s share of small price hikes.

Though this week’s seeming return to mid-winter in the Northeast isn’t considered as severe as last week’s Nor’easter, it had its share of chattering teeth. Wind chill factors in the region will be significant early Wednesday, ranging from below zero in upstate New York to the single digits and teens southward into northern Virginia, according to The Weather Channel. It also predicted temperatures well below seasonal norms, along with lingering lake-effect snows, around the Great Lakes and Lower Midwest.

The cold weather should get an assist from Nymex in pushing prices upward again Wednesday. After a slightly weaker performance Monday, the April natural gas screen recorded a 13.3-cent gain Tuesday in conjunction with strong advances throughout the petroleum futures complex. Crude oil for April delivery rose 70 cents to $54.59/bbl, and conceivably could challenge the product’s $55-plus record high in the near future.

A potentially significant production outage loomed in the Gulf Coast when Tennessee reported a force majeure leak on a segment of the Blue Water System offshore Louisiana (see Transportation Notes). Tennessee planned to keep nominations whole at 15 affected meters through Wednesday, but said scheduled volumes would be reduced to zero Thursday if the meters remain shut-in at that time. It said about 40,000 Dth/d was being scheduled currently from those meters.

Tennessee’s co-owner of Blue Water System, Columbia Gulf, ordered that an unspecified number of meters be shut in Tuesday after an unexplained pressure drop occurred on a line connecting with Blue Water. Tennessee’s leak and the Columbia Gulf event were believed to be related. Columbia Gulf did not estimate how much production might be affected.

The Blue Water leak is creating a big problem for many Gulf Coast traders, a marketer said, but it was just one of many operational issues (mostly specific to his company) that made Tuesday a big hassle. “It appears that the cash market has more strength than we expected,” he observed. The new burst of energy futures strength raises something of a “‘which comes first, the cart or the horse?’ type of question: whether cash is getting much of its strength from the screen or the other way around,” the marketer went on. He expected further firmness in cash Wednesday.

A Northeast trader agreed with the prognosis for cash numbers continuing to rise. There was heavy buying interest Tuesday by both LDCs and power generators, and it remained fairly steady throughout the cash trading session, he said. Northeast citygates were running $1.20-1.40 over Henry Hub, and were more than a dollar above first-of-month indexes in most cases, he added. Very cold temperatures below freezing have set up shop in the market area, “and wind chills are making it even worse. The trader said he expects prices “to remain robust into the weekend,” then to start slacking off along with the cold weather.

The National Weather Service’s (NWS) six- to 10-day forecasts have mostly been geographically divided between East and West in recent weeks when it comes to forecasting cold and mild regions. A considerable more unified outlook is in store for the March 14-18 workweek, the federal agency said Tuesday. It expects no above normal temperatures anywhere, and its prediction of below normal readings covers almost the entire Lower 48 states. The only exceptions where NWS looks for normal conditions is in Florida and the southern ends of Georgia, Alabama and Mississippi along with southeastern Louisiana; and south of a line running from South Texas through central New Mexico and Arizona into Northern California.

Citigroup analyst Kyle Cooper made a final estimation of a storage withdrawal in the 138-148 Bcf range to be reported for the week ending March 4.

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