With a severe ice storm continuing to wreak havoc on power systems in the central U.S. and frigid temperatures remaining in the Wednesday forecast in Canada and from the Rockies and Midcontinent through the Midwest and Northeast, prices continued to rise at a large majority of points Tuesday.

A few instances of flat numbers were sprinkled among gains that ranged from a couple of pennies to about 80 cents. The 80-cent spike was somewhat of an anomaly as all other upticks were limited to about 45 cents.

Northern Natural-Ventura was the only point outside the Northeast where losses were recorded, and Tennessee Zone 6 was the sole Northeast citygate to see an advance (indeed, the day’s biggest one). The citygate losses, which ran as high as about $2.50 at Iroquois Zone 2, represented some consolidation of the previous day’s spikes as well as the fact that regional highs in coastal areas will be in the 40s Wednesday.

Widespread icing in Oklahoma, Kansas, Missouri and Illinois was starting to relent slightly Tuesday afternoon, The Weather Channel reported, but a dangerous glaze was due to remain on the ground a while longer. Hundreds of thousands were without power in the four-state region, and some might have to wait seven to 10 days before being restored, according to Oklahoma Gas & Electric (see story in Power Market Today).

No one was answering the phone Tuesday afternoon at the headquarters of the Oklahoma Independent Petroleum Association, and a producer said the annual meeting of the Mid-Continent Oil & Gas Association that had been scheduled for Tuesday and Wednesday in Oklahoma City was canceled.

In spite of the storm’s harshness, sources reported only minimal wellhead freeze-offs.

It’s the worst ice storm in Midcontinent history, said an independent producer. He said his company was getting “some freeze-offs,” but it rained all day Tuesday, so that probably thawed much of the ice on the wellheads.

Prices may soften elsewhere Wednesday, he added, but should keep rising in at least the Midcontinent because of ice covering much of North Texas, Oklahoma and Kansas. However, warming trends in the six- to 10-day and eight- to 14-day forecasts mean spot prices could head back below first-of-month indexes pretty soon, the producer said. January futures held at $7 support Tuesday, which he took as “a good sign.”

In NGI‘s daily indexes, only Northern Natural’s demarcation and Ventura points are currently trading below index. The rest of the Midcontinent is seeing double-digit premiums to index.

Another Midcontinent producer reported not hearing of any wellhead freeze-offs. Enogex is usually the first pipe to announce such supply cuts, he said, “but they haven’t yet.” CenterPoint-East numbers tanked pretty hard at end because of relatively mild weather in North Louisiana, he said, while the other Midcontinent pipes stayed relatively strong.

A Midcontinent/Midwest marketer said his company didn’t know of any freeze-offs, but was “aware of quite a few power issues.”

In sharp contrast to the frigid conditions in much of the rest of the U.S. and Canada, most of the South will keep basking in date-specific record or near-record high temperatures Wednesday, thanks to a stubborn ridge of high pressure, The Weather Channel said. Some air conditioners are getting turned back on with highs around 80 in much of the South, but the resultant power generation load was unlikely to activate many gas-fired peaking plants.

Daniel Guertin of Lehman Brothers looks for unseasonably warm weather to continue in the Southeast, while a colder pattern is forecast for the East this weekend and early next week. The Plains should trend warmer next week, he said.

Apparently nobody thought to inform the Atlantic hurricane season that it was finished for 2007. Subtropical Storm Olga formed Monday night near the Virgin Islands and its center was inland over the Dominican Republic about 70 miles east of Santo Domingo Tuesday afternoon, the National Hurricane Center (NHC) said. Olga was expected to remain over land over the next 24 hours, which would tend to weaken the storm. The NHC’s five-day “cone” of projected tracking had Olga moving due west, passing just to the north of Jamaica and being south of Cuba’s western end Friday.

The National Weather Service (NWS) looks for above-normal temperatures for the central two-thirds of the U.S. during the Dec. 17-21 workweek. In its six- to 10-day forecast posted Tuesday afternoon, the agency predicted above-normal readings west of a line running due south from the western tip of New York state to the eastern end of the Florida Panhandle and east of a line running due north through the eastern edges of Arizona and Utah before bulging westward to include all of Wyoming, Idaho and Montana. Below-normal conditions are expected in all of the Northeast except western Pennsylvania and in the coastal half of the Mid-Atlantic as far south as northeastern North Carolina. NWS also predicted below-normal temperatures in the southern two-thirds of California, the Las Vegas area and western Arizona.

Ron Denhardt of Strategic Energy & Economic Research projects a storage draw of 138 Bcf for the week ending Dec. 7. Stephen Smith of Stephen Smith Energy Associates estimated an identical pull.

©Copyright 2007Intelligence 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.