Spikes of a quarter or more were common at eastern points Thursday morning, as the cold weather that had failed to avert general softness on Wednesday recovered its price-supportive powers in a big way. The shivering Northeast led the way with gains of up to nearly 70 cents at Transco Zone 6 non-NY, although New England points were comparatively somewhat weak. Western upticks tended to be smaller than those in the East, although such markets as Waha, Permian Basin, San Juan Basin and Sumas rose by about 30 cents or more.

“It was a fun day, especially if you were long,” said a Midcontinent marketer. Prices were chiefly weather-driven, he continued, since nearly all cash business was already completed by the time EIA came out with a bullish report of 136 Bcf withdrawn from storage last week. He felt that the screen, which built on Wednesday’s surge with a new advance of 21.5 cents, was following cash higher rather than the other way around and then got a later boost from the storage report.

The current blast of winter is more intense and much more widespread than previous bouts of cold, the marketer said. In recent weeks it has been an up-down pattern, with short periods of “relative” warmth mixed in with longer periods of very cold temperatures, but currently the cold is sustained, he added. He said he wouldn’t be surprised, though, to see moderately softer prices Friday because of the long holiday weekend.

A Gulf Coast trader disagreed about weekend prospects, however. “Can you say $6 in the supply area?” he asked in his best Mr. Rogers imitation. Cash was lying flat with the screen at first Thursday, “then took a big jump along with Nymex and outran it,” he said. Several of his late quotes were about a dime higher than earlier ones.

One source observed that Houston traders probably get a subconscious bullish feeling when they see forecasts of locally freezing temperatures; the prediction for the city was for overnight lows of 27, 24 and 32 degrees from Thursday through Saturday.

But for a Northeast marketer, “to me the key is sub-zero temperatures in the North, and we’re seeing very little of that so far.”

Talk of possible wellhead freeze-offs grew beyond Tennessee’s Wednesday warning (see Daily GPI, Jan. 16). ANR warned Thursday of colder than normal temperatures expected in its Louisiana and Oklahoma gathering areas, adding that with “the potential for supply freeze-offs,” an OFO might become necessary unless shippers reduce scheduled nominations to reflect currently flowing production volumes delivered to the pipeline. Florida Gas Transmission said it was already experiencing reduced supplies at some interconnects (see Transportation Notes) and that further reductions might result from freeze-offs.

In addition, without using the word “freezeoffs,” the three CMS Energy pipelines (Panhandle Eastern, Trunkline and Sea Robin) sounded a somewhat similar theme in saying, “Within the gas day, shippers will be required to move their receipt nominations to supply points at which flowing volumes can be confirmed and measurement verified…If differences between receipts and deliveries threaten system integrity, Panhandle [or Trunkline or Sea Robin] will take further actions up to and including the issuance of an Operational Flow Order.”

Opinion was mixed about the freeze-off warnings. “Basically they’re [pipelines] firing a shot across the bow that it could happen, but I doubt we’re going to lose anything significant to frozen wellheads,” said one trader. But another noted that he had spent time offshore, and at 40 degrees or lower, you run the risks of freezing.” Wellhead equipment that’s supposed to eliminate water from the gas flow doesn’t work as well when it gets down near freezing, he said. “I think it’s a foregone conclusion of freeze-offs in the Gulf Coast; any and all pipes are susceptible.”

One suggestion of continuing bullishness came from Salomon Smith Barney meteorologist Jon Davis, who said Thursday morning that the “Siberian Express” currently occupying the central and eastern U.S. is likely to stick around through the end of the month (see related story).

In an advisory headed by “Cold arriving in stages and waves, but don’t let daily variations fool you…,” New York City-based Weather 2000 continued: “With Canadian and Siberian air masses hitting U.S. residents over the head like an icy brick, let’s quickly anticipate and identify some ‘flies in the ointment’ before they become misleading rumors. Not only is it cold, it’s very cold. Not only is it very cold, but it’s long-lived very cold. And finally, not only is it long-lasting very cold, but cold such [as] the eastern United States has not seen (post New Year’s) in several years. But when a pattern is as dominant, intense and straightforward as this one is, it doesn’t take much to stir the kettle. Let’s examine some of these idiosyncrasies that are bound to come up on the table over the next two weeks, if they haven’t already.

“(1.) Is every single location in the eastern U.S. going to be cold every single day? (A.) No, of course not. As with any pattern covering a very large portion of a nation or continent, there are going to be some regional and temporal exceptions. For example, since most of these cold air masses will not be diving sharply south in the short term, the Gulf Coast and deep Southeast will likely remain immune from most of the chill over the next week. Future, more powerful cold will indeed strike and reach hubs like Houston, New Orleans, Birmingham and Atlanta, but not until late next week/weekend.

“(2.) Is it possible that this pattern will reverse itself and/or retrograde soon? (A.) Not likely. Nothing is impossible, but the hemispheric and tele-connection foundation for this cold pattern is pretty well entrenched and in place for some time to come. That doesn’t preclude variation, or localized, brief exceptions, but there are no signs at present pointing toward the likelihood that locations in the eastern half of the United States (starting next week) will have a net above-normal temperature week, for at least two to three more weeks.

“(3.) Why are models mentioning possibilities of dramatic changes in store? (A.) Computer models don’t handle any extreme events very well, and this ‘Polar Plunge’ is no exception. Also, one day the models may project a high of 15 degrees for seven days out, and then change that forecast to 25 degrees the next day. Sure, that is hypothetically a big change, but if the normal high for that city is 42 degrees, it’s still extremely cold. Intensely cold air masses, snowfall/snowpack [and] evolution of short-waves can create wacky flip-flops and intraday shifts in model predictions, but ‘don’t miss the forest for the trees.’

“(4.) Why are forecasters mentioning possibilities of dramatic changes in store? (A.) Human forecasters often get antsy with monotone patterns, even though they might be extreme. Give most forecasters a week or two of the same type of weather and they’ll be itching to forecast something new. This often creates the ‘Land Ahead!’ syndrome of forecasters racing to be the first to glance and call anything different on the forecast horizon (no matter how remote), similar to a sailor atop a mast of ship out at sea for a long time.”

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