Only a few flat to barely higher western points averted a clean sweep of softening in cash prices Thursday. A small prior-day screen decline joined already-negative weather and storage influences in putting downward pressure on the market.

The addition of lighter industrial load over a weekend to the above bearish market factors is believed likely to extend declines at most if not all points Friday. However, forecasts of a cold and stormy weekend in most of the West may allow modest upticks there, and a cooling trend in the Midwest should keep softening minimal in that region.

Meanwhile, what a producer called “crazy warm [weather] for this time of year” in the Northeast probably will cause market-area citygates to repeat with the biggest losses Friday, and weekend highs in the spring-like South are forecast to be five to 25 degrees above normal.

Thursday’s price drops ranged from a little less than a nickel to around 30 cents.

Several pipelines in the East warned that forecasts for unseasonably warm weather in their market areas over the weekend raised the potential for OFOs or other restrictive actions. Some, such as Transco (see Transportation Notes), were restricting or barring entirely due-pipeline imbalance make-up.

The Energy Information Administration surprised quite a few traders in estimating an 85 Bcf drop in storage inventories for the week ending March 3. The volume was near the low end of prior expectations and well below consensus estimates. In addition, the Producing region actually had a 1 Bcf build for the week. But since bearish storage attitudes have been factored into the market for some time now, Nymex traders largely shrugged. After sending April futures a little more than 15 cents down from Wednesday at one point following the report, they generated a rally that left the screen 4.7 cents lower on the day.

After all the talk about mandatory storage withdrawals being demanded by many facility operators before the March 31 traditional end of withdrawal season, some may have wondered how a subpar draw could have happened. A Gulf Coast producer had a fairly reasonable rationale. Some storage operators are bending their normal cycling requirements, he said, adding that he understood Texas Eastern to be among the pipelines adjusting their storage withdrawal ratchets. And TGT, which normally requires customers to remove 68% of their contract amounts by April 1, recently granted a waiver allowing those who withdrew only as much as 45% to avoid penalties.

The producer went on to note that larger Northeast citygate dips combined with smaller ones in the Gulf Coast to narrow basis spreads to 40-45 cents or so Thursday. That just barely covered transport variables from Henry Hub to Transco Zone 6-New York City, but it didn’t even come close on Texas Eastern from Louisiana pools to the M-3 market point because of large Tetco fuel charges, he said.

The 10 to 15 day forecast says it will get a little colder again in the Northeast, the producer said, “but I don’t think it will be enough” to make a positive price difference. Spring is so close by now that Northeast residents can practically taste it, he added.

As it has in the past, the Northern Natural Gas (NNG) bulletin board provided a telling clue about softness in the Midcontinent and Midwest. The pipe’s normal system weighted temperature at this time of year is 30 degrees, a posting Thursday said. However, NNG projected system averages of 37, 40, 37 and 34 degrees for the four days of the Thursday-Sunday period.

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