Entering a period of milder weather and spurred by the previous day’s screen loss of nearly 22 cents, prices kept falling across the board Wednesday. However, the decline pace slowed considerably. Wednesday’s drops ranged as high as about 30 cents in the Northeast, but were in single digits at a slight majority of points.

Wednesday’s trading may have established a near-term pattern, as several sources share the perception that moderate softening will continue into next week along with generally moderate temperatures in most markets. But increasing prospects of a return to colder weather in several areas by the end of February could generate a rally late next week.

The National Weather Service issued a forecast for the upcoming workweek that could be seen as helping sustain a bearish tone in the spot market. The only below normal temperatures that the agency saw for Feb. 23-27 will be in the southern two-thirds of California, the southern half of Nevada and most of Arizona. It expects a wide swath of above normal temperatures from Alaska through Western Canada and broadening out in the Lower 48 states to include most of the Rockies, Midwest, Midcontinent and South from Texas eastward. The Northeast and Mid-Atlantic, along with a strip of territory from Oregon through West Texas, should experience normal conditions, NWS said.

However, an update Wednesday for the Feb. 24-28 period contained substantial revision. In it, Florida had been added to the areas where NWS predicts above normal temperatures, but the other much larger region had been trimmed back to Western Canada and the northwest section of the U.S. (Washington and northern Oregon eastward to western Wisconsin and dipping low enough to include Nebraska. Meanwhile, NWS now looks for below normal thermometer levels in the Northeast and Mid-Atlantic as far south as North Carolina, and has expanded the southwestern region for colder temperatures to everything south and west of a line from the California-Oregon border through the Rockies into central Texas.

Meanwhile, though, few if any areas other than upper mountain elevations are expected to see sub-freezing lows for the rest of this week. Spring-like conditions will prevail across most of the southern tier of states.

“For us, 40 degrees is a relative heat wave after you’ve been enduring zero cold for a while,” said a Northeast utility buyer. She was unable to discern any developments over the next week or so that would rally cash numbers. The buyer thought it was “past time for fundamentals to take control of the market again” and not let technical factors push prices around artificially. She reported fielding a couple of inquiries about March business, but didn’t expect to get around to any trading in that area for at least another day or two.

Daily loads have gotten quite light this week, and a major reason is that power generators are constrained on their spark spreads, a marketer said. Northeast delivered basis over Henry Hub has returned to an approximately “normal” 40-60 cents, he observed. A “very bearish” Energy Information Administration storage report Thursday morning, such as a withdrawal of 130 Bcf or less, could trigger a price free-fall, the marketer said, but otherwise it’s reasonable to expect continued slow erosion of cash market quotes. However, if currently lofty oil numbers start retreating (Nymex’s crude contract for March kept rising Wednesday to nearly $35.50/bbl), he didn’t see how gas can hold up.

Florida Gas Transmission currently has the only OFO-like constraint in place (see Transportation Notes), but that didn’t keep Florida citygates and production-area quotes in FGT’s Zones 2 and 3 from slipping about a dime.

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