With sub-zero wind chill factors due Wednesday, it probably didn’t surprise anyone to see most Northeast citygates skyrocketing by multi-dollar amounts Tuesday into quadruple-digit averages. But other than a lift of about a nickel in Dominion prices and a few larger gains in the Rockies, the super-strength of Northeast prices was not reflected elsewhere.

Instead, a large majority of points fell anywhere from about a nickel to as much as half a dollar, with declines of 10-30 cents being most representative. Even the Midwest, where conditions are almost as severe as those in the Northeast, failed to see any price-elevating effects from the weather. A bit of respite from last week’s biting cold in the lower Southeast helped quell any new advances in Gulf Coast numbers; however, a new front is expected to bring freezing temperatures to most of the region again by Wednesday night.

It didn’t take long for Transco Zone 6-NYC’s peak of $10.50 Friday, the record high price of the young new year at the time, to get trampled in a big way. The new record of $17.00 is held by the Algonquin citygate, with several neighboring delivery points topping out between $15.00 and $16.00.

The new record also may be short-lived. “Wednesday will be another exciting day too,” a producer who trades the Northeast said. “Thursday is supposed to be the coldest day of the week, and there is no reason why prices couldn’t continue to rise. Right now Zone 6-NY is looking at a bid/ask spread of $13.75/21.00. The two-ways are so wide that no more deals are going to get done today…but tomorrow, hold on.”

Similarly, a Northeast utility buyer reported seeing Tuesday afternoon a next-day intraday Algonquin citygate spread of $13.00-22.00; it was up to $19.00 on the offer side at one point before slipping back, she said. The buyer reported early Iroquois Zone 2 and Tennessee Zone 6 purchases at $11.25 or less, and remembered thinking those levels were much too high, “but then they got even higher.”

Noting that most pipelines in the East had been running flat-out all last week and continuing into this week in meeting cold-weather demand, and that several (especially those to the Northeast) were maintaining transport restrictions and warning of potential OFOs (see Transportation Notes), one source wondered aloud if some of them might be experiencing delivery problems soon due to dwindling linepack and consequent lowered pressures.

An East Coast utility buyer said he was not hearing of anything approaching “crisis conditions” in pipe linepack. However, he added that his company would be using LNG supplies this week and had already cut off its interruptible customers.

Florida citygates registered the day’s biggest drop of about 50 cents into the $5.70s as Florida Gas Transmission lifted an Overage Alert Day notice after about a week’s run. “We’re due for a couple of days of warmer weather, then colder again, so the OAD will probably be back by the end of the week,” said a utility buyer in the state.

A Rockies-based marketer observed that western markets remain relatively sedate in comparison to the recent weather-related hubbub back East. “It’s downright cheap at the SoCal border because there’s almost no load there,” he said. The marketer reported telling one customer who was upset at Opal prices as high as the $3.30s to chill out “because Rockies gas is trading in the $3.80s for this summer.” It sounded like a plan to him to buy Rockies gas for storage now and bring it back out five months from now to sell at a profit.

Despite predictions of even higher Northeast numbers Wednesday, a Gulf Coast producer commented, “This could be the final hurrah for winter prices. There is no reason to hold back on storage use now; we are far enough through the [withdrawal] season that everyone who can should be pulling the maximum out.” He added, however, “This one week might have some serious upward pressure on the summer months. I think we are going to see at least a 200 Bcf withdrawal [in the EIA report] Thursday. And another huge one next week.”

New York City-based Weather 2000, which has been more consistently accurate than others in predicting this winter’s so-far colder than normal conditions, hasn’t backed off yet from its price-supportive forecast for the eastern U.S. Acknowledging that “some moderated relief [is] around the corner” in an advisory Tuesday, the firm said the severest arctic air of the season is entering the nation this week. “Extremely cold air and bitter wind chills (even exceeding the cold of last week…) is plunging down from Canada.” Double-digit negative temperature departures from normal will be widespread, it said, “in spite of the fact that the air mass is arriving during the climatologically coldest time of the year.”

Weather 2000 highlighted some quantitative actual values that it expects this week: Minneapolis could struggle to get above zero degrees F. for a daytime high; Chicago could fall below zero at night; and Houston could fall well into the 20s at night.

The final days of January should see “some well-needed moderation in temperatures” across the central and eastern States, it continued. But “it is still possible to see actual temperatures in February 2003 comparable to those seen this month, and the anomalies would be even greater (since it is a climatologically milder month).”

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