Just a day after sources had virtually nothing to talk about but how little gas demand there was, some more gas demand apparently showed up. The cash market recorded increases at virtually all points Wednesday (one was essentially flat) as blizzard conditions in the Rockies and Plains states were giving a boost to heating load.

A large majority of the gains that ranged from about a nickel to around 55 cents were in double digits. The snow-besieged Rockies was out in front of rising markets by far.

Physical prices will be hard-pressed to maintain their upward movement Thursday. After a minuscule gain of less than a penny Tuesday, January gas futures took a dive of 31.4 cents to $6.769. Although the contract had visited the psychologically significant sub-$7 level briefly on Tuesday, Wednesday’s trading marked the first prompt-month close under $7 in a long time (see futures story). Also, bearish expectations of a major increase in the year-on-year storage surplus in Thursday’s report haven’t departed the market scene.

At least one source confessed to being highly puzzled about prices managing to rally at all Wednesday. Sure, the blizzards in the central U.S. and interior West were pretty severe, but they would be winding down to some degree Thursday, which is when Wednesday’s purchases would flow, he pointed out. And temperatures in most of the East are still unseasonably mild, he said, noting predicted lows Thursday around 40 degrees in both Chicago and New York.

There was no denying, however, that it is severely cold in much of the West. The forecasts for Denver and Cheyenne, WY call for lows in the teens Thursday, and Flagstaff, AZ is expected to touch bottom at 10 degrees.

The nation’s midsection isn’t quite that bad off but still very cold with freezing lows due in Oklahoma City and Omaha, NE.

Comments about how moderate it is as Christmas approaches hadn’t ceased. The buyer for a Southern utility said his company is “trying to push gas out the door after this warm spell.” During a cold snap early in the month the utility was pulling on storage fairly heavily but “trying to be careful not to take out too much,” he said, but now it is a little worried about being able to meet withdrawal ratchets.

The buyer said it was looking a lot like last year’s unusually warm winter when his company and virtually all other Texas Gas Transmission storage customers were unable to keep up with withdrawal schedules. Luckily TGT gave them revised target levels for reducing account levels, he said. The utility has a couple of physical call options that “we haven’t been calling on in order to keep our volumes down,” he added.

The utility is not buying any new gas for January, feeling fairly confident that winter term contracts will meet most if not all of the month’s requirements, he said.

The Reuters news service of 21 industry players found an average expectation of a 62 Bcf storage withdrawal in the Energy Information Administration’s report for the week ending Dec. 15. Estimates ranged from 21 Bcf to 87 Bcf, Reuters said.

Bentek Energy predicted a 68 Bcf pull.

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