Prices achieved increases at all points Friday as returning colder weather in several areas superseded day-earlier energy futures as a prime influence. Advances ranged from about a dime to about a quarter (largely mirroring Thursday’s declines); the bigger ones of about 20 cents or more were concentrated at Northeast citygates, while the West saw most of the smaller ones in the low teens.

Despite reaching their highest levels in a year, crude oil futures seemed to have lost their gas screen-charming abilities after receiving credit for having lifted natural gas twice earlier in the week. Crude got as high as $37.45/bbl Friday, a level not seen since March 2003 during preparations for the U.S. invasion of Iraq, before finally settling at $37.26, up 62 cents. In fact, natural gas (down about a penny and a half) was the day’s only loser in the Nymex energy group as heating oil, unleaded gasoline at New York Harbor and propane also realized major gains.

The Northeast was still fairly mild for the most part Friday, but that would be changing. A New England utility buyer said her area would be “kind of warm” through Saturday, then get colder Sunday and Monday. “A high of 39 is expected Monday, and that’s a big difference from Saturday’s predicted 61.” The buyer had no deals to report, saying she would use pipeline Operational Balancing Agreements to tide the LDC over for the latter half of the weekend, but added she would definitely be making new purchases Monday.

The situation was somewhat similar in the Midwest, where a marketer said Chicago was still in the 40s Friday but would be cooling off to the 20s and 30s Saturday through Monday. “That’s still above normal for this time of year,” she added. Nicor, the giant northern Illinois distributor, came out with advisories of potential OFOs Thursday and Friday, but it didn’t look like one would be issued, she said.

The marketer reported reading an article quoting an analyst as saying industrial demand for gas was rising, “but I haven’t been seeing it among our customers.” Many of them are hurting from the sustained period of historically high gas prices, she said.

A South Texas producer with wells connected to Florida Gas Transmission said he has virtually ceased doing any new deals for awhile in the pipeline’s Zone 1 because of maintenance at Station 3 that started Thursday and runs through the end of the month (see Daily GPI, March 1). The work is curtailing about 50,000 MMBtu/d of upstream gas. It was “pretty amazing” to the producer that crude oil futures settled above $37/bbl. He thinks gas prices would be a lot lower than they are currently if it hadn’t been for the crude strength.

An eastern utility buyer said he was sticking with his storage pulling schedule for the most part, but Columbia Gas had waived a withdrawal requirement on customers reducing their account volumes down to 25% by the end of March, “so we’ve stopped withdrawing on that system.” He noted that Henry Hub cash numbers were about 30 cents below August Nymex prices, so it “might be best to buy gas for storage now to avoid having to buy it then.” It might even be possible to turn a profit by storing the gas now and selling it in August, he said.

A telling sign of rising weather load in the West was the scrolling list of winter storm alerts Friday afternoon on The Weather Channel’s web site. Besides Maine and Michigan, alerts were declared for Arizona, Colorado, Idaho, Montana, Oregon, Washington and Wyoming. But the region tended to see Friday’s smallest upticks largely because temperatures five to 15 degrees above average are forecast for this week. And a trader at the Southern California border said Los Angeles-area readings would be getting up to 80 degrees during the weekend.

The National Weather Service sees increasingly bearish weather for gas prices late this week. In Friday’s forecast for the March 11-15 time frame, NWS predicted above normal temperatures in all areas west of a line extending from the western edge of New York to the southeastern tip of Louisiana — that is, the entire western three-fourths of the U.S. The only region where below normal temperatures are expected is upper New England, the agency said.

Despite the NWS forecast and several traders’ reports of modest heating load at best last week, the Weather 2000 consulting firm continues to advise not counting winter out yet. Calling it the “you know, the stow away the sweaters one week, and then bust out the Nyquil the next week, routine,” Weather 2000’s advisory Thursday noted that a lot of people got excited about April-like temperatures in early March, “but whether it’s max temperatures now 20 degrees cooler, clouds [and] rain, or the prospect of lake-effect snow squalls or late-season clipper snowstorms on the horizon, the nation’s populace is getting a quick reality check.

“Much like November, March is a transition month and can be very volatile and variable. As a result, there is a tendency to ‘throw in the towel’ when four mild days turn out to be seven mild days, and even worst case scenarios seem comfortable compared to anything witnessed this January. But before we close the door on the harsh winter of 2003-2004 and set our sights on summer, let’s not get too giddy when snow, wind [and] ice can still appear on the northern TV newscast straight through Easter.”

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