Even with a modest warming trend getting under way Friday in parts of the Midwest, continued forecasts of sub-freezing low temperatures in much of the East and in the Rockies and Western Canada in the West were having considerably more success in boosting prices Thursday than they did a day earlier. The cash market also had a smidgen of prior-day screen support from Wednesday’s 1.1-cent rise by March futures.

A large majority of points were flat to a little more than 60 cents higher, with double-digit spikes occurring at all Northeast citygates. Softness at several locations was minor in being limited to about a dime or less.

The Energy Information Administration doubtlessly shocked at least a few traders by reporting that a mere 24 Bcf was taken out of storage during the week ending Feb. 13. The volume was way below consensus expectations, which had been remarkably consistent a week earlier but were spread throughout the 50s Bcf for Thursday’s report. March natural gas futures, ignoring spikes in Nymex’s nearby petroleum products complex, responded bearishly to the storage report by sinking 13.6 cents (see related story).

Tennessee indicated that very cold weather can be expected in the Northeast near the end of the weekend by issuing an OFO Action Alert for Sunday in its three farthest downstream zones (see Transportation Notes). In addition, Transco said it would start barring excess storage withdrawals and nominations creating due-shipper imbalances Saturday.

Florida, which continued to bask in mild temperatures Thursday while lows in the rest of the eastern half of the South were sinking to around freezing or less, will join neighboring states in shivering a bit Friday as a cold front penetrates the Sunshine State. The colder forecast prompted Florida Gas Transmission to warn market-area customers of the potential for an Overage Alert Day being issued. Orlando temperatures peaked in the lower 70s Thursday, but the city can expect a low Friday in the mid 30s, according to Madison, WI-based Weather Central.

The western South is getting a bit cooler but still experiencing seasonally moderate weather.

Although lows in the teens and occasionally single digits will still be common in the Midwest Friday, temperatures will be higher in some areas. For example, Chicago can expect Thursday’s low around 11 to rise into the upper teens Friday, Weather Central said.

Supply issues were shifting in the West. PG&E is ending Friday the low-inventory OFO it had issued for Thursday. However, Kern River reported low linepack Thursday in the two farthest downstream of its four segments, and El Paso said it had set the probability of declaring a Strained Operating Condition or Critical Operating Condition to moderate due to low linepack.

Despite Thursday’s overall gains, there didn’t seem to be any bullishness at all left in the market after such a small storage withdrawal report, a Gulf Coast producer commented. Cash numbers “were cratering” in late trading after the report came out, he said, which often is an indicator of price movement the following day. Even with freezing weather still around, that’s normal for mid to late February, so there’s really very little weather-based demand to speak of, he added.

It’s pretty safe to assume that most, if not all, points will be softer Friday, the producer continued. The Northeast might be an exception since the Transco and Tennessee restrictions indicate cold weekend weather in the region.

A Texas-based marketer agreed with the prediction of lower prices Friday. However, there were indications of slight growth of heating load in the South, he said, because his company was buying extra spot gas Thursday for some retail clients who hadn’t been ordering any supplies recently. He said he was not all that shocked by the storage report, even though it was well below expectations, because it was an approximate match for the year-ago draw.

©Copyright 2009Intelligence 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.