The most recent of an extended series of quick-hitting blasts of arctic air that has made a shambles of forecasts for a warmer-than-normal February created abundant heating load for Wednesday in northern market areas. The result was cash price gains across the board Tuesday. The return of industrial load from a holiday weekend absence also was a bullish factor.

Upticks ranged from a little less than a dime to about $1.15. Only Sumas failed to achieve at least a double-digit advance, while Transco Zone 6-New York City was the only point to rise more than a dollar. The day’s top quote was $14.50 at Zone 6-NYC. Texas Eastern M-3’s gain of 80 cents meant all Northeast citygates were averaging in quadruple digits (M-3 fell short at $9.76 Friday).

The cash market had no prior-trading-day screen support from Friday’s last 11.2-cent drop by March futures. But cash prices will have an abundance of support Wednesday after the March natural gas contract rebounded in a big way by 31.7 cents Tuesday. Its close at $8.977 was the highest prompt-month daily settlement in a little more than two years (see related story). The day’s big excitement, however, was over in Nymex’s crude oil futures pit, where the March contract set a new intraday record of $100.10/bbl before winding up the day just above $100.

What The Weather Channel (TWC) characterized as “brutal” wind chill factors will be climate features of the weather in the northern Plains and Midwest Wednesday. Wind chills may reach 40 below in eastern North Dakota and northwest Minnesota, and will approach 10 below in Chicago, TWC said. Lows will be in the teens, single digits and occasionally below zero across most of the Midwest and Northeast.

Except for sub-freezing lows in the Rockies, the rest of the West and the South will be contributing substantially less heating load than the northern market areas. Few southern areas will be getting below the 40s Wednesday, while mercury levels will reach the 70s in a few spots in southern Arizona and southern New Mexico, TWC said. The lower elevations of California will top out mostly in the 50s and 60s, it added.

In preparation for the extreme conditions occupying their market areas, Northern Natural Gas and ANR put OFO-like restrictions into place (see Transportation Notes). And although they did not issue OFOs, affiliated pipes Texas Eastern, Algonquin and Maritimes & Northeast said they were restricting nominations that would create due-pipeline imbalances or require due-shipper imbalance paybacks.

With only a month and a half left in the traditional storage withdrawal season, Southern Natural Gas reported that its inventory levels of working gas were down to 50% as of Feb. 15. Total working storage capacity on Southern’s system is 60.0 Bcf, and the company said it had 30.0 Bcf left last Thursday. Comparable periods in the last two years show that the pipeline had 33.7 Bcf (56%) on Feb. 15, 2007 and 38.4 Bcf (64%) on Feb. 16, 2006.

Despite Tuesday’s strength in natural gas futures, a Midwest marketer said he would expect physical prices to be 20-30 cents lower Wednesday. That’s going to be the coldest day of the Midwest’s current invasion of arctic air, he explained, so heating demand will be declining Thursday.

In its six- to 10-day forecast for the Feb. 25-29 workweek, the National Weather Service (NWS) expects below-normal temperatures almost everywhere east of a line running to the south-southeast through western North Dakota, the central sections of South Dakota, Nebraska and Kansas and western Oklahoma (non-Panhandle) before turning slightly to the south-southwest through central Texas. The only sections of the East not included — where normal conditions are predicted — are the southern half of the Florida peninsula and New England along with the eastern half of New York state and coastal strips of New Jersey, Delaware, Maryland, Virginia and the northeast corner of North Carolina. NWS looks for above-normal temperatures everywhere west of a line running southeastward through eastern Montana and barely inside the eastern borders of Wyoming and Colorado to just shy of the Oklahoma Panhandle’s western end before curving back to the southwest through southeastern New Mexico.

Analyst Ron Denhardt of Strategic Energy & Economic Research projects that a 175 Bcf storage withdrawal will be reported for the week ending Feb. 15.

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