With most areas returning to seasonal or warmer-than-normal temperatures, the decline in heating load was sufficient to cause lower prices at all but three points Thursday. The relatively rare substantive gain of 10.3 cents by February futures a day earlier obviously had little impact in stanching the continued bleeding of cash prices.

Flat to nearly a dime higher numbers were recorded at only Malin, the PG&E citygate and Line 300 in Tennessee’s Zone 4. The rest of the market saw mostly small losses ranging from 2-3 cents to a little more than $1.15. Most of the spot market is now averaging solidly below $3.

The plunge in Northeast quotes earlier this week slowed quite a bit Thursday, with only the New York pool in Transco Zone 6 falling by more than a dollar into the upper $3.30s. The Algonquin citygate continued to be king of the Northeast price hill even after dropping about 90 cents into the lower $4.20s.

The Energy Information Administration’s report of a 76 Bcf addition to storage during the week ending Dec. 30, which was slightly below analyst consensus estimates in the upper 70s Bcf. Perhaps the bearish view by Nymex traders was enhanced by the period of mild weather setting in, but they wound up driving prompt-month futures to a drop of 11.6 cents (see related story).

It may be debatable whether Marcellus Shale producers trying to put more gas into Line 300 in Tennessee’s Zone 4 were looking ahead to a new outlet for takeaway capacity that hasn’t been fully realized yet, but the point was the only one in the Northeast to buck the region’s softening trend. Cabot Oil and Gas is already delivering supply to Williams Partners’ Springville gathering line in northeast Pennsylvania, and while the initial volumes are being used to build linepack and for compression commissioning, transfers of up to 250 MMcf/d to Transco via Springville may begin within the next few days (see Shale Daily, Jan. 5).

“The market has been waiting for this [Springville startup] for quite some time,” said one source. It should help firm up prices in the Bradford-Tioga-Susquehanna county area of Pennsylvania, he added, which in turn will have the most positive impact on Tennessee Line 300 prices in that region. At the rate that companies have been drilling in the Marcellus recently, he doesn’t expect it to take long to fill the 250 MMcf/d of capacity in the Springville connection to Transco. (Although quotes for Transco Zone 6’s New York pool have greatly subsided since then, as recently as last Friday the point commanded a top quote of $13.25.)

Several OFOs or similar pipeline actions were ending, while MRT cited warm weather forecasts in issuing a System Protection Warning (see Transportation Notes).

The Weather Channel said record-breaking highs may continue for a while longer in the Midwest and even extend to near the Canadian border. Most other regions will range from moderately cold to mild.

Northern Natural signaled how much warmer it is than usual in its Upper Midwest market area. A bulletin board posting said that while the pipe’s normal system-weighted temperature at this time of year is 15 degrees, averages are projected to fall from 40 Thursday to 34 Friday and then to 29 on both Saturday and Sunday.

A Midwest utility buyer said his area was among the ones likely to experience a date-specific record high Thursday. It would be getting a little cooler in the next few days, he said, but that was still “relatively balmy for us” in the winter. The utility’s storage accounts remain close to full, he added, but it still must be recycled. He may be able to shuffle some of the gas between storage fields but probably will have to sell some of it into a weak market.

The buyer noted that Northern Natural Gas has not declared any System Overrun Limitations (SOL) so far; that’s rather unusual because the pipe usually issues several SOLs each winter.

A western trader said it’s a quiet period for the regional market with little in the way of weather-based demand. In contrast to some others, his company appears to be comfortable with its storage holdings and not likely to have to sell any of it.

©Copyright 2012Intelligence Press Inc. All rights reserved. The preceding news reportmay not be republished or redistributed, in whole or in part, in anyform, without prior written consent of Intelligence Press, Inc.