Even with forecasts of Friday lows in the teens and single digits in the Rockies and northern third of the U.S. and sinking to sub-zero levels in Western Canada and some locations immediately south of the entire Canadian border, prices fell at a large majority of points Thursday. The cash market also felt negative pressure from the previous day’s 13.2-cent decline by January futures.

Losses ranged from about a nickel to the $1.10 area and tended to be largest in the Midcontinent and Rockies. Nearly all of the points with flat to about $1.35 higher quotes were in the Northeast. The three top gains were all in New England (Tennessee Zone 6, Dracut and Algonquin citygate), where low temperatures are due to be in the teens or lower Friday.

The PG&E citygate was the only trading location outside the Northeast to defy the general market’s weakness. It was up about a nickel largely due to PG&E issuing a low-inventory OFO for Friday (see Transportation Notes).

Elsewhere in the West, El Paso was having the opposite problem from PG&E’s — excess supply. Only a day after canceling a warning of a potential Strained Operating Condition (SOC) because of shipper drafting (see Daily GPI, Dec. 18), El Paso told shippers Thursday it had set the probability of declaring an SOC or Critical Operating Condition to high because of high linepack. “Receipts from our supply basins are in excess of scheduled deliveries and the milder weather in the southwest Arizona service area has resulted in lower loads with actual takes below scheduled quantities,” the pipeline said. Much like Southern Natural Gas had reported Wednesday (see Daily GPI, Dec. 18), El Paso said its Washington Ranch storage facility was in maximum injection mode more than a month and a half into the traditional withdrawal season.

El Paso numbers fell about half a dollar in the Permian Basin and about 55 cents in the pipeline’s two San Juan Basin pools.

The Energy Information Administration’s report of a 124 Bcf storage withdrawal during the week ending Dec. 12 was near the top end of prior estimates and handily surpassed consensus expectations in the low to mid 110s Bcf. Nymex traders weren’t particularly impressed by the hefty pull, however, and considered another major crude oil slide as more influential in pushing January natural gas futures 7.1 cents lower (see related story).

The Northeast hasn’t been especially cold earlier this week, but that’s about to change as a major snowstorm will be shifting over into the region from the Midwest Friday. Although a modest warming trend will continue in the Midwest, most locations there will still struggle to get above the freezing level. And the Midwest can expect more arctic air and strong gusty winds to sweep southward behind a weekend storm system, The Weather Channel (TWC) said.

Meanwhile, near-balmy conditions are occupying most of the South. Highs Friday will be 10 to 20 degrees above average in most of the South, TWC said, but it won’t last. A “vigorous” cold front is forecast to move in Sunday.

Frigid weather is continuing in the Pacific Northwest and Rockies, while much of Western Canada shivers in sub-zero cold. That wasn’t enough to avert lower prices, however, although two Pacific Northwest locations saw only minimal drops of about a nickel. Sumas took the day’s biggest price hit, but it had soared way above the rest of the regional market earlier in the week and still commanded a multi-dollar premium even after Thursday’s plunge.

A Midwest marketer suggested that the big storage draw reported for the previous week might indicate that heavy storage usage is continuing and allowing price softness despite cold weather. So far the winter is looking worse than last year at this point, “and I remember it being really dreadful after Christmas” last winter, she said. And “winter” doesn’t actually begin officially until Sunday, she noted.

However, a Texas-based marketer was a bit dubious about that thinking. People with storage are usually pretty cautious about not using up too much of their accounts early in the heating season, he said. He thought it was mainly the change from previously colder conditions that had prices falling in northern markets such as the Midwest despite frigid temperatures continuing; that is, it may still be cold but not as cold as it had been, he said.

The marketer said his company’s forecasters is predicting average to moderate January weather, but there doesn’t look like much relief from northern cold until near the end of December.

He noted a plethora of pipeline OFOs or other cautions to shippers not to run up negative imbalances by drafting the pipeline systems.

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