Buoyed by a flow date that several sources expect to be the coldest yet in the East this winter, an approaching return of severe weather in the South, and a strong screen rebound, cash prices recorded across-the-board increases Wednesday.

The Northeast continued to lead the overall advance with triple-digit upticks, and Transco Zone 6-NYC again raised the bar on the record price so far for 2003 with a peak of $22.00. Points elsewhere tended to see gains ranging from about 15 cents to nearly 80 cents, with those in the range of 20-40 cents being most common. Only the Southern California border failed to rise more than a dime.

Forecasters warned of “dangerous” winter storm situations ranging from the Midwest through the Northeast Thursday, and after an early-week break from the cold, the South from Texas through the South Atlantic and Mid-Atlantic regions should be feeling it again. Although last week’s talk of wellhead freeze-offs in the production areas never amounted to anything significant, Tennessee posted a shipper advisory Wednesday warning that potential supply losses from freeze-offs combined with high market-area demand could strain its system enough to require a systemwide OFO Balancing Alert (a previously issued OFO Action Alert for “East of the Checks” — Main Line Valves 245 and 321 in the Northeast — remains in effect until further notice).

Some relief from the cold will be coming to the Northeast around Sunday or Monday, said a regional utility buyer, but even then temperatures will not be much above normal. There was an early run-up at Zone 6-NYC but quotes were fading near the end of trading, he said. The buyer also noted that it’s “funny” how price movement seems to occur in minimum increments of a quarter or half a dollar when numbers get up above $10.00, as opposed to traders occasionally haggling over quarter-cents when prices and volatility are much lower.

Opinion was almost evenly divided over whether bullishness will continue Thursday or a retrenchment is due. An eastern source was confident that “there is still room for more upside Thursday” because of widespread freezing weather and the momentum provided by a Nymex advance of 24 cents Wednesday. And a western marketer cited the same reasons, plus anticipation of a big withdrawal volume of 200 Bcf or more in EIA’s Thursday morning storage report, for thinking that prices would continue to rise.

But a Gulf Coast marketer predicted prices “will settle down a little bit tomorrow, and even more going into the weekend.” He admitted being stunned by Wednesday’s run-up. “It was unbelievable. I was sure that I got hosed on an early deal at the Henry Hub when I bought at $5.94. Then 15 minutes later I turn around and see the price is nearly is 30 cents higher.”

And a producer said he anticipates lower prices Thursday both in futures “and especially cash.” He based his reasoning on Thursday being expected to be the week’s peak heating load day, with some easing to follow Friday.

A Midcontinent trader said he could see no good reason for Midwest prices not keeping pace with the spikes in the Northeast, although both regions are experiencing similar heavy winter conditions. But, he added, “Actually I think it’s the reverse: Midwest prices are fair and the Northeast is out of control.” He had relatively little business to report for Thursday, saying, “I kind of stayed out of the way because of all the OFO-like constraints going around.”

In a related note, a marketer commented, “Yeah, I saw things go nuts in the Northeast. Production-area people are [griping] about their prices” not seeing nearly the same strength as market-area numbers, “but there is nothing going on down South that can compare to the queasiness we’ve got going on here. I’m busy as a beaver.”

A Florida utility buyer said cold weather will start returning to his state around mid-day Thursday. He didn’t think it’s a case of “whether” Florida Gas Transmission would declare a new Overage Alert Day notice, but rather how tight the imbalance tolerance will be.

A western trader has no problem at all with her regional market remaining comparatively sedate in recent weeks, even though Rockies increases of 30-40 cents were among the larger non-Northeast gains. “I like the western prices lagging behind those in the East,” she said. “It keeps my trading costs down.”

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