As a Texas marketer had suspected, Tuesday’s decline of 15.8 cents by March futures was sufficient to take cash prices lower Wednesday, abetted by moderate warming trends in some areas. Although he thought some of the areas experiencing the most severe winter weather might be able to keep firming, it turned out that double-digit drops occurred across the board.

Losses were remarkably consistent throughout the market in ranging from about 15 to 30 cents, with a large number of points racking up dips in the vicinity of 20 cents. Northeast citygates recorded most of the largest downturns.

After wavering on either side of unchanged during the morning, prompt-month futures finally settled into a modest bullish trend that left them 7.6 cents higher on the day (see related story).

Reflecting the easing of heating load, Southern Natural Gas lifted an OFO for short imbalances and Southwest Gas issued a notice about restrictions on its system designed to lower excess linepack on upstream western pipes (see Transportation Notes). However, Columbia Gas said interruptible storage service would be unavailable Thursday due to high demand in its market area.

Although temperatures were expected to stay below average a bit longer, the South was getting over the heavy snow dumps that it received over the weekend, with only a few flurries due Thursday in the southern Appalachians. Snow showers were expected to continue in the interior Northeast, but the rest of that region and much of the Midwest could expect to get mostly dry conditions and merely cold temperatures rather than the bone-chilling weather they had endured in the previous couple of weeks.

Despite chillier temperatures arriving in Southern California, most of the West remains cool to moderate outside still-freezing lows in the Rockies and Western Canada.

A Rockies producer had no problem with CIG’s drop of about 20 cents, saying CIG prices in the $5.10-30 range recently were just fine for low-cost producers like his company, which could still make profits with numbers between $4 and $5. However, he expressed concern about a major backlog of uncompleted wells in the shale plays throughout North America, saying their potential for adding gas to an already oversupplied market could wreck prices down the road.

The producer said this has been one of the biggest heating load winters he has seen in a long time, but still the gas market hasn’t been as strong as he thinks it should be. It’s gotten a little warmer in the Rockies at midweek, but the region should be turning colder again this weekend. He expects storage refills to be weakest in the West Region this year primarily because of declining Rockies production.

However, the impending completion of Kern River’s expansion (see Transportation Notes) will help the Rockies market greatly, he said, calling it the biggest westbound addition of takeaway capacity in a long time.

“People are tired of winter,” a Midwest marketer said in understatement, adding that his region can expect no significant above-freezing periods until near mid-March. But despite one of the coldest winters ever, comfort levels with storage are keeping gas prices from skyrocketing, he added. His company has needed to supplement baseload purchases with daily spot gas pretty much throughout February so far because of customers’ space heating needs, he said.

Stephen Smith of Stephen Smith Energy Associates said he projects a storage pull of 187 Bcf to be reported for the week ending Feb. 12.

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