Though chilly temperatures reigned that day along the northern tier of states and in Eastern Canada, prices softened at nearly all points Thursday on expectations of weather moderation and the demand slump of a holiday-lengthened weekend. Flat to mildly higher numbers in the Rockies compared with drops elsewhere that ranged from barely lower to down more than half a dollar in the Northeast.

The Energy Information Administration may have shook up a few traders with a report of 48 Bcf in storage withdrawals during the previous week. The volume was above the high end of prior estimates and represented the second straight drawdown in a period regarded as the beginning of the traditional injection season. But since a withdrawal had been widely anticipated and factored into market psychology, the screen eventually retreated to a small daily gain after pushing up about a dime shortly after the EIA’s data release.

However, a Calgary source reporting early Chicago citygates in the mid $5.40s said the bullish nature of the report boosted numbers into the $5.50s in the few remaining deals left to be done after the report came out. Intra-Alberta also ran up to the high C$6.70s late after starting in the low C$6.60s, she said.

Since daytime highs throughout the West were in the 50s and 60s, relative firmness in Rockies prices was “a lot stronger than we expected,” a marketer said. Jokingly, he added, “I think it’s because all the smart traders have been fired by now and only dumb ones are left.” More seriously, he said temperatures would be cooling off in the Rockies Friday, but starting to warm again Saturday.

“Unbelievable!” a Northeast utility buyer exclaimed. “We just can’t shake this winter.” She reported her area going from 80 degrees Wednesday to “freezing this [Thursday] morning.” However, market-area prices were looking ahead to a return to near normal thermometer readings Saturday and Sunday and responded with substantial declines that were biggest in New England (Tennessee Zone 6 and Algonquin citygate) and at Transco’s Zone 6-NYC pool. The buyer said temperatures were expected to be back around 60 degrees Sunday, “but we don’t see any 70s or 80s for a ways off” into the future.

Sources agreed that the long holiday weekend, along with weather that either was already mild or expected to get that way soon in virtually every market area, resulted in very quiet trading activity.

Conceding that his estimation for the EIA report “turned out to be low,” Citigroup analyst Kyle Cooper continued: “This again emphasizes the extreme and increasing importance of temperature on overall natural gas demand. When temperatures are cold, or hot, expect the actual reports to appear bullish in relation to expectations. Conversely, moderate temperatures are likely to result in storage changes bearish in relation to expectations. However, it also depends how rapidly the market adjusts to these changing dynamics as expectations may fall closer to ours. Considering the temperature differentials, our initial expectation for [this] week’s report looks for a build to exceed 40 Bcf. This will compare against a build last year of 69 Bcf…and [a] five-year average build of 25 Bcf.”

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