Just looking at Wednesday’s price movements in a geographic vacuum, one might assume it was the West that had a monopoly on cold weather and that conditions were fairly balmy back east. That would be an inaccurate assumption, but it was Rockies/San Juan points recording substantial gains of up to about 80 cents (Cheyenne Hub) while eastern markets were mixed but mostly lower, led by plunges of about half a dollar at some Northeast citygates.

A producer found the general eastern weakness surprising, especially in the Gulf Coast. “The cold is still there,” he pointed out, “and we are still looking at a big withdrawal” volume in EIA’s storage report Thursday morning. Cash started strong, but then Henry Hub ended the day in the $5.90s after having been as high as the mid $6.30s, the producer said. “Maybe the market was just overheated. Price weakness [Wednesday] may just be a psych-out for Thursday.”

It’s gotten cold again in the Northeast, but temperatures aren’t as low as during late January, a regional utility buyer said. “Maybe they’re [traders] discounting the storage number tomorrow,” he said with a laugh in trying to rationalize the big citygate turnaround from Tuesday’s spikes. Area weather is due to stay cold until a weekend warming trend arrives, he noted, and the South was just getting ready for an invasion of snow and ice starting Wednesday night.

Perhaps the market should have paid more heed to tumbling prices in Tuesday’s late deals in the East, the utility buyer continued. He saw one signal that current weather isn’t as severe as in the recent past on pipeline bulletin boards: “You can see that Northeast pipes such as Texas Eastern are not curtailing IT and other services like they were in the last two weeks.”

Perhaps he spoke too soon. Later Wednesday afternoon, Algonquin cited forecasts of increased demand and said two restrictions would take effect Thursday: no incremental due-shipper gas will be available anywhere on the system, and no nomination increases through the Cromwell (CT) Station will be accepted except those within NAESB bumping guidelines and Primary No-Notice service.

A western marketer said one key reason for Rockies strength, especially at the Opal Hub, was “because Jonah Field [upstream of the Hub] has water problems and it’s very cold in the area, so it’s likely some wellheads have frozen.” He observed that with all the water associated with its production, Jonah seems to be more susceptible to such problems than other Rockies fields. He jested that maybe Jonah should be given a different biblical name: “Job Field, because its trials and tribulations never seem to stop.”

Another trader of western points said that outside of snowy weather in the Rockies, “it doesn’t seem all that cold in the West, but the demand is definitely there.” PG&E had put out a news release late Tuesday urging efficient use of gas by customers because its meteorology department “is predicting crisp, clear winter days followed by cold, and in some areas, icy evenings and early mornings throughout much of Northern and Central California.” However, a Los Angeles-area source said the cold would stay confined mostly to PG&E’s service territory, adding that temperatures were in the mid 60s in his neighborhood. All California points rose by a nickel or less Wednesday.

A marketer said his staffers were calling for a 200 Bcf withdrawal volume in the EIA report. Analyst Kyle Cooper of Salomon Smith Barney said his final estimation of the report is for a draw of 190-200 Bcf. But once again his confidence remained low “as the various models indicate a rather wide discrepancy between the projections. A case could be [made] for a draw of 210 Bcf or so just as easily as a case could be made for a draw of 180 Bcf.” This week’s report will compare with a year-ago volume of just 79 Bcf and a five-year average of 120 Bcf, Cooper added.

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