Growing heating load across northern market areas propelled the cash market to double-digit increases across the board Wednesday. Gains ranged from a quarter or so to more than half a dollar and were distributed fairly evenly across geographic areas.

Although the National Weather Service last week had predicted above normal temperatures throughout most of the East during this business week (see Daily GPI, Oct. 28), it’s turning colder already. Along with chilly air, snow mixed with rain showers are possible in western New York and parts of the Great Lakes region Thursday night and Friday, The Weather Channel said.

The rally occurred despite analysts being convinced that the Energy Information Administration will announce a storage injection Thursday morning that will eclipse the record volume of 3,254 Bcf in late November 2001.

A screen uptick of nearly 20 cents, combined with the rise in heating demand, is expected to keep cash quotes on an uphill trek Thursday. Natural gas futures meandered slightly to either side of flat while cash was trading Wednesday morning, but later moved higher as its petroleum-related neighbors in the Nymex trading pits spiked despite reports that morning of increases in crude oil and unleaded gasoline inventories (the American Petroleum Institute and Department of Energy differed on whether stocks of distillates, which include heating oil, had gone up or down). News reports cited the election victory of President Bush, who is expected to keep filling and maybe even expand the Strategic Petroleum Reserve despite high oil prices, as the chief instigator of the oil futures advance. A partial outage of a refinery in St. Croix in the U.S. Virgin Islands was also cited as a factor.

“It’s a typical November day” in the Midwest, a marketer in the region said, so the market based its rise on some genuine weather load for a change. Winter must be just around the corner now, she said, “although I wish it was further around the corner, like January maybe.” She also noted a supply problem due to a Trunkline rupture north of Houston (see Transportation Notes) keeping a lot of South Texas gas from reaching the market area.

A Texas-based trader said she didn’t really see a significant increase in utility load in the South, where most of her company’s customers are, but they had to pay the higher prices because they were competing for Gulf Coast supplies with the colder Northeast. Also, the chill is coming to the South, she noted. For example, Atlanta was expected to have an overnight low Thursday around 45 degrees. A lot of people told her they would pull gas from storage rather than pay these prices, the marketer continued. “I don’t know if that’s smart,” she added, because they could rue such action come January or February if it’s an especially cold winter.

A marketer also didn’t see all that much weather-related load in intrastate Texas and Southwest markets. In fact there was little air conditioning load left in Texas now that a cold front has blanketed the state, she said. Highs are topping out around 70 degrees or so in the Lone Star state.

Even more bullish weather is coming, according to consulting firm Weather 2000. The “coldest November weather since notorious November 2000 [is] poised to enter U.S.,” it said in an advisory Wednesday. “Pooling and chilling over Northern and Western Canada, invigorated by above-normal snow-pack, the chilliest weather of the year is about to pour into the Midwest [and] Northeast commencing by this weekend. For some, the cool October 2004 for the big Northeast cities was the evidence, for others it will be the 30-degree swings within a week’s time across the south-central [U.S.] which will be the sign, but no two ways about it: Autumn is abbreviated this year.

“The Great Lakes, Ohio Valley, New England and Mid-Atlantic will be the most harshly hit, but the most dramatic changes will felt over the South. Like all air masses, nothing lasts forever and there will be ebbs and flows. But we now have teleconnections in alignment and enough polar air drummed up in the “Canadian Kitchen” that there will be more routine cycles of the colder waves in contrast to the capriciousness we witnessed in October.”

Following several days of sizeable reductions in the amount of shut-in Gulf of Mexico gas, the restoration pace has slowed again. Still, there was a little more progress. According to the Minerals Management Service, the outage count stood at 745.98 MMcf/d Wednesday, or 6.9 MMcf/d less than the day before. The cumulative total since Sept. 11 reached 111.758 Bcf, MMS said.

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