Whatever among several possible reasons was responsible for Tuesday’s sharp price upticks was losing its power Wednesday. The market was retreating across the board in movements ranging from flat to more than a dime lower. However, Algonquin citygates were the only points with declines exceeding a dime; other drops were mostly around a nickel or less. Sources could detect no signs of another rally being in the cards.

Several traders agreed that in Tuesday’s run-up the market had largely defied basic fundamentals, but it was having to face reality again in yesterday’s softening. Even a blizzard between now and March might be unable to revive prices again, said one, “and I don’t know of anybody thinking blizzard.”

AGA said 156 Bcf was taken out of storage last week, which initially seemed bullish, since it beat the 130-140 Bcf range that had been popular among prior estimates Tuesday. But after a quick test of the $2.40-41 area, the screen was back down into the $2.20s not long afterward. Futures analyst Jay Levine of Advest Inc. said of the morning’s positive futures readings and then the flop following the AGA report: “I think the market got bid up on anticipated higher than expected withdrawals. Although 156 [Bcf] is on the high side of expectations, my belief is the market was looking for an even higher number.”

An aggregator confirmed this, saying, “We were hearing late expectations today [Wednesday] of nearly 200 Bcf, so the 156 [Bcf] we did get was definitely neutral to bearish” in comparison. The screen had dropped 17 cents at that point, after hitting its $2.41 high, he noted.

A marketer commented that February aftermarket numbers probably peaked Tuesday and are likely to stay softer through the rest of the month. He doesn’t foresee any plunges; rather “it’s going to be the slow, drip-drip-drip water torture form of price erosion.” A rally is possible if screen support holds at $2.22-23, he said, but just about all cold weather support of prices is fading away. Some forecasters are calling for below normal temps in March, the marketer said, but he doesn’t believe that will be enough to turn the market around. “It seems like everybody is willing to pay carrying charges on storage rather than withdraw it,” he said.

Although it was still cold in much of the Northeast Wednesday, regional temperatures were due to start moderating today. A Northeast marketer said temperatures would be getting into the 40s, and there was nothing else to support gas prices in sight. “There’s a strong belief now that March futures will end up below $2,” he said.

Operator Northern Natural Gas said Wednesday the force majeure event that caused the shut-in late last week of Matagorda Offshore Pipeline System off Texas has been extended due to weather and sea conditions. Approximately 100 MMcf/d is affected.

A marketer noted that Questar, normally among the lowest-priced pipes in the Rockies, has started commanding numbers near parity with those of Kern River and Northwest this week and above CIG’s. One reason, he said, is that distributor Questar Gas is buying plenty of gas for transport on its pipeline affiliate and paying up front for it to make sure that no interruptions occur during the Winter Olympics ongoing around Salt Lake City.

Despite a general consensus about softness in the near-term market, a couple of traders found a couple of mild positives for prices. Henry Hub swing swaps for the balance of the month were trading at $2.35-37 Wednesday, which was barely below the day’s incremental average, but well above the monthly index of $2.04, a marketer said. And a producer reported a Chicago citygate sale for March around $2.38, about 3-4 cents over Wednesday’s numbers.

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