Flat to about 20 cents lower at five Northeast market locations and NOVA Inventory Transfer (NIT) constituted the only exceptions to a firming cash market Tuesday. Cash prices had a supportive prior-day increase of 11.2 cents by February futures, but the chief reason for Tuesday’s gains at all other points was what the Weather 2000 consulting firm called the “most frigid arctic air yet of [the] season” currently pouring into the central U.S. from Canada.

Most points recorded upticks ranging from a couple of pennies to C60 cents at Westcoast Station 2. A large majority of the market saw double-digit gains.

Not all Northeast citygates were soft. Texas Eastern M-3 and Transco’s two Zone 6 pools were up 20-35 cents or so as New York City was due to see Tuesday’s low of about 39 degrees drop to less than 30 Wednesday.

Bitter cold will occupy the Midwest Wednesday, with blizzard conditions possible in parts of Michigan’s Upper Peninsula, The Weather Channel said, and a “powerful” cold front will be moving into the Northeast. Another forecaster, AccuWeather.com, also used the word “bitter” to describe the blast of arctic air surging into the eastern U.S. from the Northwest. The forecasting firm said it will cause temperatures to drop by as much as 40 degrees Wednesday from Tennessee to upstate New York. The colder weather will be accompanied by wind gusts as high as 60 mph, it said.

“When the cold wave hits Chicago late this afternoon [Tuesday], the moderately mild weather of [Tuesday] will be replaced by an onrushing flood tide of wind-driven cold air,” AccuWeather.com meteorologist Elliott Abrams said in his blog. “In a matter of hours, temperatures will tumble to the teens, and face-freezing winds will sweep the cityscape. Not only that…it will turn very cold real fast…temperatures in Pittsburgh will be 20-30 degrees lower at midday tomorrow [Wednesday] than they are [Tuesday, but] the change in New York City may not be much more than 10 degrees.”

The new outbreak of harsh winter weather should ensure that both Chicago and Minneapolis tally their most days with the mercury level dropping below zero during January in nine years, Weather 2000 said.

A cold front is also forecast for upper sections of the South, but much of that region will remain relatively moderate for at least another day. Relatively little change in temperatures is due in most of the West; Rockies lows will remain in the teens, though.

The Upper Midwest will endure a couple of days of extreme cold, but Northern Natural Gas signaled that a warm-up will be occurring by Friday. Saying its normal system-weighted temperature at this time of year is 16 degrees, the pipeline projected system averages of minus 7 Tuesday, zero Wednesday, 11 above Thursday and 21 Friday.

It was 3 degrees above zero with a wind chill of 20 below at mid-afternoon Tuesday in his company’s service area, said a Midwestern utility buyer. He said he had little time to talk because he was trying to locate some incremental intraday gas because it had gotten so cold.

The buyer said so far he hasn’t tried to line up any Rockies supply through the Rockies Express-Northern Natural interconnection because the utility’s transportation contract with Northern doesn’t include the necessary receipt point, but he expects to explore the possibilities later this year.

In spite of the severe cold that is keeping Calgary-area temperatures below zero (the high was about minus 10 Tuesday), NIT was one of the few points to drop Tuesday. NOVA changed its imbalance tolerance range Monday to encourage packing of the system (see Transportation Notes).

A producer explained the NIT softness by saying that “people have adjusted, more storage is coming out [of the ground], and I think volumes have been cut back at the export points” because of the huge provincial demand. Despite the extreme cold, the producer said he didn’t get any calls for intraday gas. February bidweek numbers were flat to down Tuesday because of a 9.9-cent expiration-day decline by February futures.

Southern Natural Gas is experiencing a more rapid drawdown of storage than usual. Noting that its total capacity is 60 Bcf, Southern said as of last Thursday its estimated working gas inventory was 40 Bcf, or 67% of capacity. That compares with 49.3 Bcf (82%) on Jan. 25, 2007 and 42.4 Bcf (71%) on Jan. 26, 2007, Southern said.

The National Weather Service (NWS) has a relatively bearish six- to 10-day forecast for the Feb. 4-8 workweek. The agency expects above-normal temperatures everywhere east of a line running southwestward from western Minnesota through eastern Nebraska, western Kansas, the western end of the Oklahoma Panhandle and the southeast corner of New Mexico. In the more sparsely populated West, NWS predicted below-normal readings everywhere west of a line going south along the eastern borders of Montana and Wyoming before veering slightly to the southwest through central Colorado and central New Mexico. The greatest temperature deviations above normal will occur in the Northeast and eastern end of the Midwest, according to NWS.

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