If you look up the dictionary definition of “mixed,” by now the entry might be reading, “See Thursday’s cash gas market.” The number of rising points slightly outweighed the falling ones, but many of the gains were small (in single digits) and most of the losses were large at 30-55 cents or so.

Although the overall weather trend is toward more moderate conditions, it was starting to look like winter again in the southern Appalachians and Smoky Mountains, according to The Weather Channel. Winter storm warnings and advisories were in effect for parts of Georgia, South Carolina, North Carolina and Tennessee. Meanwhile, date-specific record lows were set Thursday morning across southern Arkansas, Louisiana and eastern Texas, TWC said.

Meanwhile, it was “a little bit warmer” in the Northeast, a couple of utility buyers in the region concurred. Although it didn’t seem like enough of a change to impact heating load substantially, citygates dropped by as much as nearly half a dollar. Sunday is when temperatures “will get comfortable for us again,” said one of the buyers. By next week it will be mild enough that “we’ll be back to putting lots of gas into storage,” he continued. The buyer noted that despite Thursday’s moderate price advances on Gulf Coast pipes, “current Gulf Coast cash is being offered at very weak discounts compared to May.”

Speaking of storage, the Energy Information Administration threw the market a curve ball by saying that 9 Bcf was withdrawn last week. Yes, you read it right: “withdrawn.” Coming after two straight weeks of injections preceding the traditional April 1 start of injection season, and compared with previous expectations centered around a build of about 10 Bcf, the report of a pull “had to be considered bullish,” a marketer said. Nymex traders obviously thought so too, sending the May screen up more than 20 cents on the day. (The crude oil and heating oil futures contracts took a beating as news reports said traders were concerned that a quick resumption of Iraqi oil exports might create a global oversupply.)

Sources were hesitant to predict whether the storage report would rally prices Friday in the face of moderating weather and the slump in industrial load that typically accompanies a weekend. However, as one pointed out, any price-boosting impact wouldn’t be felt until Friday because the great majority of Thursday morning’s cash business had already been completed by the time EIA released its data.

Even if softness reigns Friday, the report is likely to have bullish effects down the road because it makes the job of refilling storage to comfortable levels before next winter tougher (see related story). This was reinforced by an NGI source’s speculation Wednesday that withdrawals by Midwest and Northeast utilities over the previous few days to cope with belated blasts of winter could very well mean that another net withdrawal is upcoming in EIA’s report next week (see Daily GPI, April 10).

Along with the Northeast, the Rockies/San Juan market was the scene of many of the largest price drops. One factor is that regional weather load is way down, a marketer said, noting that Denver-area temperatures had been around 75 degrees recently and would stay that way at least through early next week. Maybe even more important, he went on, is that due to various pipeline maintenance constraints in the Rockies and Southwest, “my flow on El Paso is down to about 74% of what I really want lately.” Such a level of allocation means that traders likely are nominating and selling excess volumes to meet contract obligations, “and we know what happens when supply and demand get out of whack” through overselling, the marketer commented.

There are other circumstances contributing to Rockies/San Juan weakness, he said. Transwestern is still having compressor problems that cut about 100 MMcf/d from San Juan Lateral capacity (see Transportation Notes), which causes some gas that would have used the lateral to get to California to back up into the Rockies instead. Also, some Rockies bearishness may have been spurred by unconfirmed rumors that maintenance at the Echo Springs Plant in Wyoming (see Daily GPI, April 8) would end a day early Friday, putting an estimated 100 MMcf/d or so back into market.

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