Friday’s nosedive in petroleum-based energy futures (along with a modest retreat in the natural gas contract) failed to exercise its usual belated “following the screen” appeal in Monday’s cash market. Instead, physical prices extended their weekend gains Monday, boosted by fresh incursions of winter weather in the northern market areas and in the late going by renewed surges in Nymex’s energy products.

The Northeast, where winter might be making its last hurrah this week, led the price uprising with gains as large as about 30 cents. Elsewhere, quotes ranged from flat to up nearly 20 cents, but the flat to barely higher points were rare. A majority of Monday’s upticks were in the range of 8-15 cents.

Buyers who may have been advising recently to stick a fork in winter because it’s done are probably ruing their words now, particularly if they pay for delivered Northeast gas. According to The Weather Channel (TWC) forecast for the region Tuesday, “Preliminary assessments suggest snowfall totals on the order of 5 to 10 inches with locally greater amounts not out of the question. And there could be a good deal of sleet, too, mainly from southeast Pennsylvania to Long Island.”

And the Midwest, still shaking off the tail end of a storm system late last week, can expect a new disturbance with accumulating snow from the northern Plains through the Upper Midwest Tuesday. However, Midcontinent/Midwest upticks mostly on either side of a dime reflected the likelihood that this would be a less potent event than the one in the Northeast.

Meanwhile, the South was contributing little to overall demand with pleasantly mild to cool temperatures. Current overnight lows probably are making Southerners choose between keeping the windows open or shut at night, but probably not inspiring much air conditioning use yet, one source said.

Saying “weather fundamentals are coming back into cash market,” a Northeast utility buyer added that his area is due for 7-10 degrees below normal Tuesday, with possibly up to a foot of snow. Temperatures will stay below normal for the next three days, then start warming up again, he said. Despite the new load increases, his utility plans to stick with its schedule for winding up storage pulls by the end of March.

A Gulf Coast marketer commented that he was not seeing “that much ‘real’ demand out there,” even with price-supportive weather returning to the Midwest and Northeast. He couldn’t detect much storage injection load either, saying he thinks market-area buyers are trying as best possible to balance storage use with new purchases and not overdo either one. Price volatility also was on the low side Monday, the marketer said. Prices went up a little after mid-morning in sympathy with the screen strength, but then slipped again near the end of trading, he said.

The rise of just over 12 cents in natural gas futures for April was overshadowed by tremendous run-ups in the oil-based products. Crude oil led the charge by soaring $1.25 to $37.44/bbl. Supply concerns continued to be fueled by expected OPEC production cuts next month, political tensions in Venezuela, and low gasoline inventories and slack refinery operations with the U.S. driving season approaching. But there was no doubt Monday that the ramifications from last week’s terrorist bombings on Spanish trains were giving the greatest boost to crude numbers psychologically.

The California market recorded gains of 10-15 cents or so after weekend high-linepack OFOs by SoCalGas and PG&E were restricted to one-day-only affairs (see Transportation Notes). But Rockies/Pacific Northwest increases were limited to single digits as near-record warmth in California and high temperatures in the rest of the desert Southwest are not creating enough heating load to offset moderating conditions in the Rockies.

“Southern California prices jumped up a bit more than I expected today,” said a western trader. “Tomorrow [Tuesday] I bet they will steady out to the rest of the market.”

A trader in the Florida market said she was doing all production-area deals in the $5.50s on Florida Gas Transmission because “there’s virtually no citygate load to sell into.”

A couple of sources noted Monday they are noticing absences among several of their usual trading counterparties this week due to spring break vacations with children. “That should keep things quieted down for a while,” commented an eastern utility buyer.

Noting that last week’s weather “was very warm across most of the country,” Lehman Brothers analyst Thomas Driscoll said he expects a “very low” storage withdrawal of 25 Bcf to be reported for the week ended March 12. The volume compares to an 82 Bcf pull last year, Driscoll said, adding, “Last week’s weather was 20% warmer than normal and 28% warmer than last year… If our withdrawal estimate is correct, the storage surplus versus a year ago will increase from 407 Bcf to 464 Bcf and the storage variance versus five-year averages would decrease from a 103 Bcf deficit to a 47 Bcf deficit.”

Kyle Cooper of Citigroup chimed in with a final estimation of a 41-51 Bcf withdrawal in Thursday’s report.

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