Prices continued to spike in the Northeast Wednesday, with a few other regional citygates joining Transco Zone 6-New York in jumps of about a dollar or more and Texas Eastern M-3 skyrocketing by more than $2. However, this week’s bullishness showed signs of stalling, with Gulf Coast numbers generally only a few cents both up and down from flat and markets in the Midcontinent/Midwest and West mostly on the moderately softer side.

Gains and losses were about evenly mixed as numbers ranged from flat to about $2.10 higher and to a little more than C25 cents lower (Westcoast Station 2).

A couple of producers agreed that despite the overall price strength sparked by the North American cold snap during the first half of December, the market “isn’t out of the woods yet” on the possibility of numbers eventually tanking due to the record inventory levels of storage.

A two-day run of prior-day screen support for the cash market will end Thursday after January natural gas futures retreated by 6.1 cents Wednesday despite major strength in Nymex’s petroleum product contracts (see related story).

The Weather Channel’s forecast of Thursday wind chill factors up to the 20s below zero across northern New England and upstate New York and no more than the teens above zero continued to propel Northeast citygates to new big increases. But the weather outlook in several other regions, although still cold for the most part, was generally in the direction of milder conditions than earlier this week. For example, although Chicago is due to still fail to get above freezing, its high-low range 30-25 predicted for Thursday by Madison, WI-based Weather Central is about 10 degrees in each instance above Wednesday’s readings.

After seeing several sub-freezing lows in the last week or so, the freezing area is about as cold as it’s expected to get across most of the South, and Florida will be bottoming out around 50-60 or so in most sections.

Much of the West was fairly moderate already, and parts of the Rockies are starting to participate with Denver highs in the low 50s expected Thursday. Alberta is just starting to thaw, but predictions of peak temperatures on either side of 40 represent considerably milder conditions than at the beginning of the week.

The Northern Natural Gas bulletin board indicated the relative warm-up coming to the Upper Midwest. With a normal system-weighted temperature of 20 degrees at this time of year, the pipeline expected to see averages of 1 and 12 Wednesday and Thursday rising to more seasonable levels of 19 and 18 Friday and Saturday.

Commenting that “one cold blast isn’t going to make a winter,” a Midcontinent producer said his hunch is that the market still has a chance of prices tanking this winter because of high storage levels.

He also doesn’t look for cash numbers to keep rising any further. The trends have been toward lower prices near the end of cash trading over the last couple of days, he said, and that usually points out the direction of next-day quotes. Freezing temperatures had been dominant in his area through early this week, but now it’s sweater weather during the day.

The producer noted that Midcontinent basis has been weakening, with Panhandle Eastern starting the week a few cents above the prompt-month Nymex gas contract, but as of Wednesday it was nearly a quarter under Henry Hub and little more than a dime below Nymex.

A Rockies producer also still perceived the possibility of much lower prices due to abundant storage. “We’ve had a pretty good run-up” in prices through December so far, but he was not sure if the cold weather that has pushed the market higher in the last couple of weeks will be sustained long enough past the Christmas-New Year holidays to keep excess storage from depressing the spot market. One key factor is that some producers are “not cutting the mustard” in holding back output enough to balance supply and demand, he said.

The producer said Rockies wellhead freeze-offs have diminished since last week, but he thought not all production had returned because sometimes it takes a few days to restore a well’s production after a thawing period starts.

He also agreed with the Midcontinent producer that most prices are likely to be lower Thursday, saying his area is starting to see some fairly mild highs in the 50s.

Bentek Energy said it projects a 180 Bcf storage withdrawal will be reported for the week ending Dec. 11. Noting their expectation of a 185 Bcf being reported Tuesday, SunTrust Robinson Humphrey/the Gerdes Group analysts said a pull of that magnitude “is typically not experienced until mid-January and would compare rather bullishly to last year’s 124 Bcf withdrawal and the 116 Bcf five-year average.”

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