The cash market took a midweek breather following two days of mostly strong gains at nearly all points. Wednesday’s quotes were mixed but predominately to the downside, with many points flat or close to it in either direction. Cooling trends Thursday in the Northeast, Midwest and Rockies are keeping heating load fairly sizeable, but it is likely that with the traditional end of storage withdrawal season less than a week away, mandatory withdrawal ratchets are starting to supplant spot gas purchases more than before.

A majority of points ranged from flat to nearly a quarter lower. The rest were up between 2-3 cents and a quarter. Despite Denver being due to see Wednesday’s high of about 69 degrees fall to the mid 50s Thursday and the low to sink to a little less than freezing, Rockies gas took the biggest price hits.

In contrast to the above-average weakness in the Rockies, Sumas recorded Wednesday’s biggest uptick. A “drafting/entitlement advisory” by Northwest boosted Sumas numbers when the pipeline noted Tuesday afternoon that colder temperatures are predicted in its market area for the next two weeks and it has limited withdrawal capability at the Jackson Prairie storage facility. Northwest said that if it experiences excessive drafting, it will declare customer-specific and/or general entitlements for overruns for receiving parties located north of the Kemmerer (WY) Compressor Station. Such an action creates extra demand for Canadian exports at Sumas.

Although snowfalls and lows in the vicinity of freezing remain in the forecast for northern market areas, there is no doubt that spring has arrived in the southern half of the U.S. The Midcontinent is joining southern states from the East Coast to the desert Southwest in expecting highs in the 70s and 80s Thursday.

SoCalGas ended a high-linepack OFO Wednesday, resulting in a gain of a little more than a nickel at the Southern California border.

Primarily because April natural gas futures tacked on another 15.3 cents Wednesday to recent gains amid spikes by Nymex’s petroleum product offerings (see related story), a trading representative for several Gulf Coast producers thinks most spot prices will be slightly higher Thursday. However, she noted that Henry Hub for Friday flows was being bid on ICE at $9.05 and offered at $9.40, adding that “all the bid-offer spreads are huge.” She also reported that someone did a rest-of-month Hub deal at $9.41 (it averaged in the mid $9.20s Wednesday in NGI‘s survey).

The trader said she finished indexing all the supply available to her for April by Tuesday afternoon but was still getting calls for more baseload gas Wednesday. If possible, she said, she may try to buy from other suppliers to fulfill those requests.

“Last year we had a freeze on the day before Easter,” a utility buyer in the South said, but for now there’s no cold weather in the near-term forecast, just nice spring days. His company added 30 MMcf/d of April baseload to 90 MMcf/d that was already under term contracts, he said. The buyer quoted two packages of April gas into Trunkline- East Louisiana at basis of minus 2.75 cents and minus 0.26 cent. Noting that basis is usually priced in quarter-cent increments, he said he suspected that the minus 0.26 cent offer was made to get a tiny edge on those made at minus 0.25 cent. He also bought TGT Zone 1 at index minus 0.25 cent.

A Texas-based marketer reported Chicago citygate basis at plus 9 cents Wednesday, saying it was higher than usual because of a big premium to index. It’s looking like Chicago fixed prices for April will be in the $9.50s, he said.

Strategic Energy & Economic Research analyst Ron Denhardt estimates a 43 Bcf storage withdrawal for the week ending March 21. George Hopley and Michael Zenker of Barclays Capital Research weighed in with a 35 Bcf projection. Looking further afield, Citigroup’s Tim Evans looks for pulls of 45 Bcf, 45 Bcf and 25 Bcf for the weeks ending March 21, March 28 and April 4, respectively.

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