Not even forecasts of next-day weather staying relatively moderate, combined with Monday’s drop of 5.1 cents by February futures, were able to knock continued general firmness out of the cash market Tuesday. Somehow the widely acknowledged fact of abundant storage remaining available is having little impact on continued purchases of spot gas.

The only mitigating factor that one source could see is that another short blast of cold is due by the weekend, and buyers are stocking up now in preparation.

Only a 2-cent drop at Agua Dulce and flat showings at a few other points were left out of gains ranging from 2-3 cents to about 60 cents. It should come as no surprise by now that the Northeast again was home to all of the biggest price moves.

The screen again provided a negative signal for next-day cash trading as prompt-month futures fell 7 cents to $2.941 (see related story).

The CIG-Henry Hub basis spread has essentially returned to parity after CIG was at a 21-cent deficit as recently as last Thursday.

A shut-in of the Rockies Express interconnect with Tennessee at Guernsey, OH, starts Wednesday for an undetermined time (see Transportation Notes). The market impact should be slight as it has been noted recently that Marcellus Shale production has been crowding out most of the Northeast’s demand for Rockies supply.

Withdrawals from Southern’s two storage fields continue to fall far short of those in the previous two years. Southern said that as of last Thursday it still had 54.2 Bcf in inventory, or 90% of its total working gas capacity of 60.0 Bcf. This compares with 42.7 Bcf (71%) on Jan. 6, 2011 and 45.0 Bcf (75%) on Jan. 7, 2010.

Much of the weather outlook will more closely resemble spring than winter for at least one more day. However, by Thursday colder temperatures and occasional snowfall will be showing up in the Midwest, Northeast and to a lesser extent in the South. The Rockies is already on its way to more wintry conditions, with Denver predicted to experience a low in the upper single digits Wednesday. The Pacific Coast will progressively range from mild in the south to chilly in the Pacific Northwest to subfreezing lows in most of Western Canada.

A Midwest marketer said her area is typical of many others in the region in having no snow and temperatures in the mid 40s, much milder than usual for January. And more of the same is due Wednesday, she said. It’s no wonder that weather-based demand is weak because much of the winter so far has featured a lot of cycling back and forth between short periods of cold and moderate conditions, she said.

Stephen Smith of Stephen Smith Energy Associates said he had raised his initial estimate of a 90 Bcf storage draw for the week ending Jan. 6 to 94 Bcf.

©Copyright 2012Intelligence 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.