Milder weather trends in the East combined with already moderate conditions in most of the West to drag cash prices lower at a large majority of points Thursday. The gain of 8.4 cents by March futures a day earlier had little impact in averting softness in most of the cash market.

Triple-digit plunges at Northeast citygates led the downhill run in which most points ranged from 2-3 cents to nearly $4.55 lower. Most of the points that ran against the overall market grain by being flat to a little more than a dime higher were in the West, where the weather, albeit seasonably mild in most locations, was due to get a little chillier Friday as a prelude to below-normal temperatures predicted for the region in the coming week.

Tennessee’s implementation Thursday of a Critical Day 1 OFO had looked like an indication that firmer quotes would continue in the Northeast. That proved to be a false signal, though; although the Northeast will continue to see lows around freezing or lower Friday, that represented warmer weather than what had preceded it.

The same principle of still-frigid but milder conditions was able to take Midcontinent/Midwest prices lower Wednesday, and it worked again Thursday as few locations other than those along the Canadian border were expected to get as low as freezing Friday. Chicago is expected to peak near a relatively balmy 50 degrees (as opposed to around freezing Thursday) while Tulsa is expected to breach the 70 level.

The Southeast faces another cold start Friday morning, The Weather Channel said, “but much warmer air will rapidly flood eastward from the south-central states later Friday through the weekend.”

Even though Florida Gas Transmission (FGT) renewed an Overage Alert Day (OAD) Thursday, it was obvious that traders were betting that the OAD would not survive through Friday. The Florida citygate recorded one of the day’s largest plunges of nearly $3.70, while Florida Gas Zones 2 and 3 saw drops of about 30 cents and nearly $1.15, respectively.

Kern River continued to report high linepack Thursday in the three farthest downstream of its four segments.

The Energy Information Administration’s report of a 195 Bcf storage withdrawal from storage during the week ending Jan. 30 was a bit higher than consensus expectations centered around 190 Bcf but well within the range of prior estimates. Nymex traders took a modestly bullish view of the report in taking the March futures contract 4.5 cents higher (see related story).

The six- to 10-day forecast is bearish for prescribing above-normal temperatures in the eastern half of the U.S., but the 11- to 15-day forecast calls for a return to below-normal readings in much of the East.

A Western Canada producer said his area could expect colder temperatures in the next couple of weeks, but they would be “not too cold, just normal.” He characterized the recent cash market as “spotty” and certainly not as strong as one would have anticipated in several weeks of cold weather. His company had no problems with finding a home for its gas currently, but “it doesn’t bode well” for a month or so down the road when spring draws near.

Usually Alliance Pipeline maintenance is negligible, the producer said, but cuts in Authorized Overrun Service earlier this week and more that are scheduled Friday were causing problems for suppliers with Chicago-area customers.

He said “shut-in economics” are virtually inevitable for producers during the rest of 2009.

Although FGT-related prices were taking a dive Thursday, a Florida utility buyer noted that its OAD tolerance Wednesday and Thursday was stricter than usual at 15% (although that is considerably looser than the tolerance most pipelines enforce during restriction periods). It was getting so cold in Florida that “we ran out of pipeline capacity,” he said. He had to break off a conversation with NGI because he was having to work around getting cut on FGT nominations.

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