Tuesday’s 18-cent drop by January futures proved to be more influential to the cash market than sliding temperatures in much of the East. The result was price drops across the board Wednesday.

Losses ranged from about a nickel to 55 cents or so and were largest in the Rockies despite forecasts of lows in the teens and 20s there Thursday.

A further futures decline of 7.7 cents Wednesday will keep downward pressure on cash numbers Thursday (see related story), although the anticipated growth of eastern heating load as the weekend approaches may be able to overcome the screen guidance.

A frigid forecast limited Midwest price losses to some of Wednesday’s smallest. The Great Plains and Midwest will be in the grip of windy mid-winter cold Thursday, with snow showers over the Upper Midwest and lake-effect snow squalls over the Great Lakes, The Weather Channel said. “High temperatures will range from around 10 in northeast North Dakota to the low and mid 40s in southeast Kansas and far southwest Missouri,” it added.

Cold fronts will create freezing lows in both the Northeast and much of the South, but that obviously was insufficient to put a floor under spot prices. Florida will be rapidly warming up, allowing Florida Gas Transmission to end an Overage Alert Day Wednesday. Florida Gas Zone 3 and the Florida citygate were down about 30 cents or more.

The Rockies will stay below freezing for the most part Thursday, but actually will be in the midst of a moderate warming trend. The rest of the West remains seasonally moderate, with Portland, OR, due to peak around 50 degrees.

A Rockies producer expressed surprise that prices in his area could fall so much with Denver temperatures in the 20s. He noted that pipeline constraints had ended Tuesday for Rockies Express (REX) at Wamsutter Hub and at WIC’s Douglas Compressor Station (see Transportation Notes). However, REX will be at capacity Thursday for receipts at WIC’s Sitting Bull Compressor Station, he added.

All Rockies producers are concerned about whether warm weather later in December could affect their year-end reserve reports, he continued. A good sign is that Rockies basis differential typically narrows (that is, gets stronger relative to other markets) at the end of the year, he said. But, he cautioned, Rockies prices could still collapse if a warm spell comes along.

It’s warmed up enough to melt snow on local roadways, said an Upper Midwest marketer, but the region is due for more snow and freezing temperatures through next week. Although Dec. 21 marks the official start of winter, she said, it feels like winter has been well under way already in the past couple of weeks.

It’s been cold enough to buy spot gas for customers each day recently, the marketer went on. The timing of the Thanksgiving and Christmas holidays means her company will have to rely on a 35-day meter reading from Consumers Energy at the end of December instead of the usual 30-day reading, which will require buying more gas for the customers than usual, she said. The company is wary of a possible OFO by Michigan Gas Utilities because it has no storage, she said.

Based on reports from 50 companies, Minerals Management Service (MMS) said 1,544 MMcf/d of hurricane-related production outages remained in the Gulf of Mexico Wednesday. That represented a reduction of 261 MMcf/d from the MMS statistics update posted Nov. 19. Crude oil shut-ins fell by 18,306 b/d in that period to 193,910 b/d, MMS said, while the number of evacuated platforms dropped by seven to 51.

The National Weather Service (NWS) predicts below-normal temperatures for nearly the entire U.S. during the Dec. 8-12 workweek. Only eastern New England (including all of Maine and New Hampshire) are excluded from a six- to 10-day forecast for below-normal readings everywhere east of a line running northward through central Arizona and western Utah before turning westward and northward again to include all of Idaho along with the western halves of Oregon and Washington state. NWS expects above-normal conditions only in most of Southern and central California along with a big chunk of western Nevada.

Barclays Capital analysts said they expect a storage withdrawal of 74 Bcf to be reported for the week ending Nov. 28, “reflecting the impact of colder temperatures over the Thanksgiving holiday weekend.”

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