Old Man Winter is showing signs of surprising longevity for an aging senior citizen. The cold and sometimes snowy weather that had been around earlier in the week in the Rockies was leaving that region Friday but was showing up or expected in much of the East.

As a result, nearly all points were seeing fairly strong price gains for the weekend, led by advances of about 30 cents at Northeast citygates. The Rockies and Southern California border were among the rare points declining moderately.

Friday’s trading through the end of March was primarily weather-driven, sources agreed. The upticks ignored the usual lower demand associated with a weekend and a drop of nearly a dime in May’s debut as the prompt month in gas futures. Nymex’s crude oil and heating oil contracts also registered small declines.

A Northeast trader said a radical change in New England temperatures due to begin Sunday presented something of a dilemma. The region was expected to see highs of around 60 degrees Saturday, but to be close to freezing on Monday, “and that had people wondering about the flexibility in pipeline deliveries,” he said. The result was quite a bit of Monday-only deals at significant premiums, the trader said, quoting Dracut in the mid $5.60s for all-weekend gas but in the $5.80s and $5.90s for Monday-only delivery.

A Northeast utility buyer said last week’s generally mild weather would help further the early start of 2003 storage injections signaled by Thursday’s EIA report. He noted that while a regional cool-down was due over the weekend, “the storage survey is taken through Friday and thus any impact of the cooler weather will not be seen” until nearly two weeks from now. The buyer found it hard to gauge the impact of the Dracut outage set for next Friday and Saturday, saying, “We don’t trade any Tennessee Zone 6, so it will not directly affect us. However, it is safe to say that with the offshore Canadian supply reduced, the overall Northeast market will be a little tighter and that should bring up the prices of other zones on the Tennessee system.”

A marketer said it had been a “pretty quiet market in West Texas” until a cold front started moving through the state Friday. Waha and El Paso-Permian numbers were up 15 cents or so as Texas utilities came out buying for some anticipated moderate heating load, he said. “They even kept calling into the afternoon, not desperate for supplies, but still wanting more gas.”

A Midcontinent utility had some bullish news to report. Quite a few of its customers were using fuel oil this month because it was economic for them after March’s high indexes, “but all of them will be back on gas as of April 1,” a staffer said.

A producer sounded encouraged as he reported seeing “some decent activity this month in fixed-price bidweek trading…not as much as we would like and not at all locations, but nonetheless things are starting to be, shall we say, better.” Some traders are starting to be really active, he continued, naming a couple of utility-affiliated East Coast units as ones who “should start doing a lot more business sometime soon. As more people jump into the market, you will start to see more of what I like to call ‘velocity.’

“We are seeing that people are focusing their trading on the more liquid hubs and ignoring the non-liquid locations.” But commenting on the continued general lack of market liquidity, the producer added, “We’ve still got a long way to go before this is all fixed. We will need to get more players back in the market and some more of the bigger players back on their feet. There are some signs that this is happening.”

For a change bidweek is featuring “relatively” cheap gas, an industrial end-user said. “For most of this winter I’ve been seeing indexed gas trading at premiums. This time there’s plenty of gas out there, and all the offers were index-minus.”

A Northeast buyer remarked that going forward, “a big issue this summer will be the high demand for pipeline cacacity, which will be fueled by the heavy need for space to move Gulf Coast supply to the market areas for Consuming Region storage refills. This high demand for capacity is already having an impact on basis differentials, with April Transco [Zone 6] New York City was trading at a hefty premium of 55-60 cents to the Henry Hub.”

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