Winter may be over as far as most traders are concerned, but there are still a few lingering hints of it that, along with fresh strength in the energy futures complex, proved sufficient to drive most points moderately higher in Thursday’s overall mixed price picture.

Virtually all gains were limited to about a dime or less, while California and Pacific Northwest points were joined by scattered ones in other regions in recording losses that were mostly small but ranged as high as about 15 cents.

A bit of snow was accompanying relatively moderate cold fronts in parts of the Midwest and Rockies Thursday, and their effects were expected to be still felt Friday before a weekend warmup begins. The South and Northeast remained relatively mild Thursday but could expect their own cold fronts beginning Friday and Saturday respectively, according to The Weather Channel. Upper reaches of the Gulf Coast states could see frost this weekend, TWC said.

The Energy Information Administration signaled a calendar-premature start of storage injection season by reporting a build of 7 Bcf in U.S. inventories last week. The report seemed ostensibly bearish because most prior guesses were for further withdrawals, and few had ventured to predict even a tiny injection. However, April gas futures shrugged off the actual figure with an expiration-day gain just shy of a nickel, undoubtedly feeling some heat from tremendous advances in the nearby crude oil and heating oil trading pits. Oil numbers soared as it became increasingly evident that the Iraq war will take considerably longer to end than initially expected.

“It’s cooler today [Thursday] than it was earlier this week, and will be even cooler Sunday and Monday,” said a Northeast LDC buyer, but he didn’t see any “major” increase in heating load as a result. “I anticipated an injection in the EIA report because I was doing it [putting gas into storage] myself last week. Why wouldn’t you go ahead and inject now before prices start rising again?” The buyer thinks cash prices are getting near their start-of-spring lows and will rebound as storage demand starts building in early April.

There was “a little upward trend” but nothing terribly significant in morning cash business, said a Gulf Coast marketer who quoted Columbia Gulf-onshore from $4.80 to the high $4.80s.

“Just when you thought all the snow is melting, it is snowing again in Denver,” said a western trader. “Obviously, heating demand is up and late-March prices at Opal from the high $3.80s up to $4.00 are reflective of that.” However, that strength wasn’t carrying over to the bidweek market, he said, where Opal is trading back in the $3.15-20 area. “Because of this spread, we are withdrawing gas here in March with the plan of replacing it with cheaper supply in April. This is typical of the Rockies market — it’s either feast or famine. There is always either too much gas or not enough.”

Looking ahead, the trader thinks “it should be interesting” to see how an April 3-7 total outage of Transwestern’s San Juan Lateral (see Transportation Notes) will affect the market. Because the outage will cut off gas moving from Northwest to the Blanco Hub, he expects it to depress Rockies prices while driving up numbers at El Paso-San Juan and ultimately the Southern California border.

Utility buyers in both the East and West reported being fence-sitters as of Thursday afternoon on whether they would buy any baseload gas for April or not. While one in the Rockies said definitely not (“I’ll ride the swing market instead”), others in the Southwest and along the East Coast said they would make their decisions Friday, indicating that purchases were not a must and could be influenced by which way bidweek numbers move.

To a Northeast utility buyer, “bidweek is essentially already dead for me” Thursday. He said he saw a little April strengthening Thursday “but nothing significant.” Basis was weakening, he said. “Texas Eastern East Louisiana basis was minus 3.5-4 cents two weeks ago, but today I was doing Tetco East LA at minus 7.5 cents.”

A marketer had a slightly different perspective on the bidweek trend, saying Gulf Coast numbers were “down for April since early morning.” Because of a dearth of active dealmaking during bidweek, he is looking for “a very active April swing market.”

A power generator said Northeast market area prices for April in the $5.65-80 area “are a far cry from last month.” Even though New York City prices have fallen far relative to their high perch for the March bidweek, he said “it still makes sense to buy April Gulf supply for the purpose of shipping it to the market area. A good reason why this is possible is that April is a ‘summer’ month [for Texas Eastern] and therefore Tetco decreases the fuel cost by a large degree. At current price levels, that makes the variable cost of transport on Tetco about a dime cheaper. For example, with East LA trading at 7-10 cents back of the [Henry] Hub and M-3 at 49-55 cents above the Hub, and your variable cost of transport is 51-52 cents for April, it is a no-brainer to ship the gas.”

That was not the case during March when it was “sometimes economically prudent to inject East Louisiana pool supply into storage, turn off your transport, and buy M-3 gas,” he continued. “This is why we saw an injection in this morning’s storage release and why we will see one again next Thursday.”

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