Freezing

Citing “significant demand” in its Florida market area as a result of freezing temperatures, Florida Gas Transmission declared an Overage Alert Day with 5% tolerance for negative daily imbalances Thursday.

As a result of near-freezing temperatures in the state ofFlorida, Florida Gas Transmission issued an Overage Alert Daynotice Friday with a 15% imbalance tolerance.

An Administrative Law Judge (ALJ) with the California PublicUtilities Commission (CPUC) has recommended the Commission approvean emergency motion by Southern California Edison to freeze theformula for avoided cost payments to qualifying facilities at theAugust rate of $4.5133/MMBtu, rather than post the September rateof $6.4567.

A winter storm sweeping through the South, along with freezingtemperatures expected to last through the weekend in much of theU.S. from the Rockies eastward, resulted in rising prices at nearlyall points Friday.

Due to freezing weather, Northern Natural Gas declared a SystemOverrun Limitation for all market-area zones Thursday.

With freezing temperatures essentially a no-show throughout theU.S., cash prices continued to decline in most markets Wednesday,with the biggest declines occurring in the supply-engorged Rockies.However, except for western points most of the softness was mild,and some Northeast citygates registered moderate upticks.

What a difference a week can make. Bull traders, nearly ready tothrow in the towel a week ago, have become “cautiously optimistic”higher prices are in their future. And they have good reason tofeel that way because the market entertained a flood of positivenews last week, which gave bulls and bears alike little choice butto bid the market higher. The April contract broke above the 40-daymoving average at $1.80 on Friday and was propelled 5 cents higherby speculative fund buying to finish the day up 9.8 cents at$1.853. Volume was a heavy 108,348. For the week, April gained 22.5cents.

It was still freezing and snowy in much of the Midwest andNortheast Thursday, but cash traders continued to bank on anapproaching warming trend that has been ballyhooed since thebeginning of the week. Prices fell by about a nickel to a littleover a dime in across-the-board softness. The Martin Luther KingDay weekend (in which some apparently are getting a half-day offthis afternoon in addition to the actual holiday Monday) added tothe general bearish mood.

The severe winter cold snap last week triggered unprecedentedprice spikes at spot points in the Pacific Northwest and NorthernCalifornia. PG&ampE Citygate prices hit $6.18/MMBtu on Monday andwere near $5 on Tuesday. Prices jumped to $11.05/MMBtu at Sumas onthe previous Friday for weekend flow, and on Monday and Tuesdaystayed north of $6.