Although a few scattered points in the Gulf Coast and Northeast were able to make small gains Wednesday, the rest of the cash market bowed to modest heating load and the previous day’s futures weakness in recording quotes that ranged from flat to down a little more than 30 cents. Most of the larger losses were concentrated in the West, where seasonable temperatures dominated despite cold and snowy mountainous areas.

Although high temperatures are expected to be in the freezing 20s Thursday in the most northerly parts of the Midwest and Northeast, other sections of those regions will range as high as the 50s, according to The Weather Channel (TWC), causing their general outlook to be normal or a little above normal for early December. Meanwhile, the South’s expected range of highs from the 50s through the 80s make that area unusually warm, TWC said.

One source noted that expectations for Thursday’s storage report (in which no revision is anticipated this time), many of which look for a withdrawal in the 70s Bcf, contributed to the overall softening Wednesday because such a pull would substantially increase the current surplus to year-ago levels.

Cash-screen convergence remains elusive as Henry Hub’s decline of about a nickel combined with an uptick of a little more than a nickel in January futures to widen their spread to around $1.70.

A Northeast utility’s fuel buyer said it had gotten a little warmer in his company’s service area, so it had some baseload supply under contract that it couldn’t use for immediate burns Thursday. “A lot of the pipes aren’t allowing excess injections right now, so we had to take it into off-system storage,” he said. The buyer doesn’t expect to need to make any swing any purchases through the end of this week, but said the utility should start seeing an increase in heating load next week.

“Who knows?” replied a Gulf Coast marketer when asked about any chances for rallying prices anytime soon. He observed that in his experience, just when the market thinks it has a downward price trend pegged, something like Wednesday’s futures advance comes along to change the trend. “It’s a quiet market for us” right now, he said. He expects demand to remain subdued into the weekend, but to pick up next week with colder weather expected in the East.

It’s hard to tell when — or even if — the EIA’s 32 Bcf storage reporting mistake on the day before Thanksgiving will fade away as a topic of trader discussion. On the day when the federal agency announced that it plans to accept public comments on its policy for revising storage data (see related story), an East Coast utility buyer said he’s still upset at EIA. “Their withdrawal volume was so out of whack from analysts’ estimates that I wish they had just stepped up to the plate and announced that they would delay the report until they could check further on the data,” he commented.

During the Dec. 13-17 business week, the National Weather Service expects below normal temperatures everywhere east of a line running from central Michigan through central Louisiana. It also predicted below normal readings in an area encompassing eastern Oregon, southern Idaho, northeastern Nevada and nearly all of Utah. The agency looks for above normal temperatures in a vertical band from the Upper Plains through the Midcontinent into West Texas, widening at its southern end into New Mexico, southern Arizona and southwestern California. Above normal readings are also expected in western Washington and northwestern Oregon.

©Copyright 2004 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.