With the Midwest already several days into a bout of harsh winter weather and the Northeast about to rejoin it big-time Wednesday (along with the South to a lesser extent), it was hardly surprising to have prices rising at most points Tuesday. Northeast citygate spikes led the overall uprising as the region, after a brief respite Tuesday from a frigid and snowy weekend, was due to see lows plunge into the teens at most locations Wednesday (the Buffalo forecast was for zero).

Most of Tuesday’s minority losses of a little less than a nickel to about a dime occurred in the West, where seasonal temperatures were dominant, along with a few points in the Gulf Coast and Midcontinent. The rest of the market ranged from flat to up about $7.35.

The Northeast was seeing prices rally by even bigger amounts Tuesday than the triple-digit plunges it had experienced a day earlier. Transco’s Zone 6-New York pool recorded the day’s top quote of $18.50 and averaged highest at nearly $16. It was joined by all the other Northeast citygates in averaging well above $10.

Cold as the Northeast forecast was, folks in the Midwest almost certainly would have been glad to trade places. Chicago was expected to bottom out just above zero Wednesday, while such locations as Minneapolis and Des Moines, IA, could expect lows of about minus 17 and minus eight, respectively. Despite the much more frigid temperatures, Midwest citygate gains of less than a dime (with a couple of flat numbers) were negligible in comparison to the Northeast price spikes.

Although the South is getting colder and will have lows around freezing or a bit less in most sections Wednesday, daytime highs in the 40s and 50s greatly limited the anticipated increases in heating load. However, an arctic front will bring much colder weather to the region Thursday, The Weather Channel said.

Eastern pipelines continued to add restrictive actions to help cope with the high-load issues of the current blast of cold (see Transportation Notes). Southern Natural Gas has taken no such action yet, but said although it was “too close to call” on whether a Type 6 OFO for short imbalances would be issued Wednesday, one was “highly likely” Thursday and Friday.

One section of the West was having the opposite problem. Southwest Gas declared a Stage 3 OFO due to excess customer banking on its system, and upstream pipe Kern River said high linepack had spread systemwide. Even with its linepack situation, Kern River quotes were flat largely due to predicted Rockies lows in the teens providing localized heating load. Otherwise the West is due to see merely mild to chilly conditions from the Pacific Northwest through California and the Southwest.

February futures had scant support for Tuesday’s cash market with their drop of 2.6 cents a day earlier. But for Wednesday the screen guidance will be highly negative after the February contract plummeted 35.8 cents Tuesday (see related story).

The ongoing cold siege is not giving as much support to prices as a Midcontinent producer expected. “You’d think an extended period” of low temperatures would have boosted the cash market more than it has, he said. He leaves money on the table if he doesn’t sell early in the day, he said, adding that later prices usually “get hammered.”

The producer said he thinks the main reason that cold weather isn’t having a more salutary effect on prices is because storage withdrawals are getting up to maximum pace. Here it is about half-way through the traditional withdrawal season, but the industry is still a ways from having pulled half of the working gas from storage, he said. A lot of people held back on their withdrawals in December just in case, he said, and although the current cold weather seems to justify such a strategy, the quicker pace of withdrawals is keeping cash prices relatively low.

The producer reported having tried to sell into NGPL-Midcontinent at $4.10 Monday but finally had to accept $4.07. But on Tuesday he said he made an intraday sale at the same point for $4.30 when the buyer could have gotten cheaper gas a day earlier.

It’s a hard call on Wednesday’s cash market, the producer continued; it will be an influence battle of major cold remaining in the northern market areas Thursday vs. the screen’s big drop Tuesday.

Referring to analysts expecting shut-ins later this year as prices continue to languish, he said he couldn’t be sure if the price is accurate, but had a feeling that Midcontinent producers will shut in rather than take less than $4/Mcf for their gas.

In its six- to 10-day forecast for the Jan. 19-23 period, the National Weather Service (NWS) expects below-normal temperatures to continue everywhere east of a line running southward from western Wisconsin into East Texas. The agency predicted above-normal readings for most of the area west of a line running southward from central Minnesota through western Iowa before curving to the southwest through central Kansas, western Oklahoma and West Texas. The exceptions, where NWS says normal conditions are due to prevail, are the Pacific Northwest states along with western Wyoming and most of Utah and Nevada.

Citi Futures Perspective analyst Tim Evans said he looks for a 100 Bcf storage withdrawal to be reported for the week ending Jan. 9, followed by larger pulls of 160 Bcf and 140 Bcf for the weeks ending Jan. 16 and Jan. 23, respectively. Stephen Smith of Stephen Smith Energy Associates expects a slightly larger draw of 105 in the week ending Jan. 9, saying that was down from his original estimate of 118 Bcf.

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