Only an advance of less than a dime by El Paso’s Bondad pool in San Juan Basin averted an across-the-board sweep of falling prices Friday. Quotes were pressured lower by dwindling heating load in the East, the previous day’s screen drop of 6 cents and the slump in industrial demand that typically accompanies a weekend trading period.

A couple of declines were in single digits, but the rest ranged from a little more than a dime to nearly 60 cents. Northeast citygates, which had occupied the highest sections of the price hill all last week because of a Nor’easter winter storm raging in the region, saw all of Friday’s largest drops. Losses outside the Northeast were remarkably consistent across all markets in ranging from about 15 cents to 30 cents.

A continuation of low temperatures in much of the East is likely to keep a floor under cash prices this week, but the outlook beyond that is murky, as milder weather is forecast for the mid-March period by some meteorologists.

Although the Midwest and Northeast were expected to see some weekend moderation from last week’s sieges of cold and snow, the warm-ups would be limited and patches of snow were still possible in both areas, The Weather Channel (TWC) said. It predicted temperatures up to seven degrees to either side of normal for the South through Monday, while most of the West would be experiencing above normal mercury levels by Monday that should last for most of this week. “Spring will definitely be hiding out in the West,” TWC said.

A Midwest marketer said that although the region would be “a little warmer” over the weekend, he didn’t see any big demand changes there. He reported “a lot of interest in buying gas for the summer” already. He thinks those people likely are anticipating a hotter summer than last year’s season and are trying to lock in storage injection supplies at a lower price now. It’s easy to look at futures contracts stair-stepping higher through the next few contract months and reach that conclusion, the marketer noted.

Noting that Florida Gas Transmission had reinstated an Overage Alert Day notice only a day after ending an earlier one (see Transportation Notes), a utility buyer in Florida said conditions in the northern part of the Sunshine State weren’t quite as bad as the pipeline’s “near-freezing” description. Yes, overnight lows were getting down into the 30s, she conceded, “but the weather is nice this afternoon.”

Citigroup analyst Kyle Cooper made an initial estimation of a storage withdrawal somewhere in the vicinity of 135 Bcf to be reported for the week ending March 4. He also commented Friday that “huge [year-on-year] inventory surpluses will be significantly reduced over the next two weeks as this week last year witnessed a draw of only 28 Bcf. Even the next week last year had a draw of only 46 Bcf. With our early projection of a draw of probably something in the 250 Bcf [area] over those same two weeks [this year], the surplus may be reduced by as much as 175 Bcf. However, that would still [leave] the yearly surplus at over 250 Bcf.”

The Weather 2000 consulting firm disagrees somewhat with predictions of a milder mid-March. It paints this picture for the month: “…continued warmth for the West (centered around the northwestern quadrant), continued cold for the East half of the U.S. with an active and wintery storm track, and not much variation from week to week. Extrapolated, this would yield some of the largest March HDD [heating degree day] totals and snowstorm frequencies for the East half of the nation in modern history, rivaling or even exceeding benchmark years such as 1996, 1984, 1980 or 1978.”

©Copyright 2005Intelligence Press Inc. All rights reserved. The preceding news reportmay not be republished or redistributed, in whole or in part, in anyform, without prior written consent of Intelligence Press, Inc.