Northeast losses of up to half a dollar led overall softening in the cash market Thursday as the scraps of heating load that had given mild support to prices at midweek continued to recede. Declines outside the Northeast were generally modest, with most in single digits and some points hanging in there with flat performances.

A system that had left a lot of frozen precipitation in the eastern section of the South earlier in the week was due to have moved out into the Atlantic by early Friday, leaving normal to above normal temperatures in its wake. Meanwhile, other regions continue to experience relatively mild weather for early February. The West can expect colder temperatures and possible snow showers in the upper Rockies and northern Plains starting Saturday, according to The Weather Channel, but market impact should be minimal since these areas are sparsely populated.

The Energy Information Administration created a small stir with its report of 188 Bcf being withdrawn from storage during the week ending Jan. 28. The volume fell short of virtually all prior expectations and was 27 Bcf below the consensus estimate of 215 Bcf. The screen dropped after the report, ending the day down 22.7 cents.

The Reuters news service carried a story saying the report “triggered a flood of skepticism from traders” and — harking back to the Thanksgiving week debacle — prompted some discussion of a potential revision next week by EIA. The gist of the revision argument was that some believed that the weather during the week in question was just too cold to have allowed a draw of less than 200 Bcf.

However, several sources queried by NGI said they had not heard any such revision talk Thursday. “At least the Nymex traders didn’t go crazy this time” when a storage report was substantively different from expectations,” one said.

A trader who markets gas on behalf of several Gulf Coast producers, speaking later after first being asked the subject, said a marketer who had called in the interim reported not hearing anything about a possible revision, “but he did say the withdrawal was much lower than he had expected.” The trader said she is mostly inactive in the swing market, having baseloaded most of her clients’ gas in bidweek. “About the only thing I’m trading is when a producer comes up with a little extra supply to sell,” she said.

A Midwestern marketer, who also reported hearing no revision talk, commented, “You would have expected the screen to go lower anyway in response to dropping demand fundamentals” even if the EIA report had matched up exactly with expectations. She looks for continuing weakness in cash prices, saying a colleague had received a report saying that nearly all of the U.S. except Texas is supposed to have above normal temperatures through mid-February. It was “sunny and in the 30s” in her area Thursday, which is about normal, and supposed to get up to 40 degrees this weekend, she said.

On the other hand, the market is getting softer due to loss of heating load in several areas, “but that’s temporary,” said a Gulf Coast trader. He estimated that “probably around the middle of next week” is when heating demand will be building up enough again to rally prices, but agreed that most markets will be mild into early next week.

©Copyright 2005Intelligence 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.