Low temperatures around freezing or lower were due to keep spreading Friday in the Midwest, Midcontinent, Rockies and Western Canada, and that kept prices rising in most of the cash market Thursday. The recent firmness will be hard-pressed to sustain itself Friday, though, after storage inventories were reported to be already rising prior to the traditional end of the withdrawal season.

Most of Thursday’s losses ranging from 2-3 cents to about 15 cents were at western, Midcontinent and Northeast points. A majority of the cash market was flat to a little more than 15 cents higher. As on the day before, most price movement was by single digits.

The close of storage withdrawal season is typically considered to be around the end of March, but the Energy Information Administration confirmed that net injections are already under way when it reported a 3 Bcf build for the week ending March 20. Not surprisingly, the Nymex reaction was highly bearish as traders sent the April natural gas futures contract 38.2 cents lower on the day before expiration (see related story).

The somewhat premature addition to storage was not totally unexpected, however. At least one previous estimate had correctly called for a small injection, and Southern Natural Gas had reported in mid-March that inventories at its two storage facilities in Louisiana and Mississippi were growing instead of shrinking (see Daily GPI, March 18).

Weather may limit Friday’s expected cash market softness. The South is expected to remain stormy, which will tend to dampen any potential cooling load from highs that will stay mostly in the 70s. And mostly seasonal weather is forecast for the Northeast, with relatively moderate highs around 50 or above. However, freezing lows are due to continue for a while longer from the Midwest through the Plains and Rockies. A major blizzard in the northern Rockies is receding to some extent, but snow is still in the forecast for mountainous areas of the West, The Weather Channel said.

CIG said it was removing an underperformance cap for its Powder River Lateral that had resulted from the blizzard earlier this week in the northern Rockies.

Since a fairly mild weekend, “demand has picked up pretty well,” said a Midwestern utility buyer. The local forecast looked to stay cold with sub-freezing lows at least through the weekend, he said, adding that Thursday afternoon temperatures were 10 degrees below normal.

The report of storage injections beginning earlier than normal had a debilitating effect on bidweek prices, the buyer continued. He had already bought some April baseload gas for index flat at the demarcation point of Northern Natural Gas. But after the storage report came out Thursday morning he was able to pick up additional demarc packages at index minus 10 cents.

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