Tuesday’s cash market prices shrugged-off a late plunge on theNymex futures screen on Monday, as they edged upward on hype fromthe first big snowstorm of the season. Most price points added acouple of cents to Monday’s gains as a powerful storm system plowedeastward after tormenting the midsection of the country. Accordingto weather services, several inches of snow accumulated from theDakotas southwestward to Colorado and the mountains of northern NewMexico and Arizona.

“There’s a couple of things going on out there,” said aMidcontinent trader, who reported higher prices across the reigion.”The cold weather in the Rockies is keeping gas in the Rockies and,therefore, adding pressure on prices out here.” In addition,maintenance on ANR’s southwest mainline Alden Compressor Station is reducing capacity in the area by 125 MMcf/d . “This ispreventing Oklahoma intrastate gas from entering that system andcausing a short squeeze in the field,” he said. “ANR SW tradedalmost flat to Henry Hub [Tuesday], which is really unheard of.”

Another trader noted the weakest point in the wholeMidcontinent/Midwest region was Chicago. “The citygates aren’t nearas strong as they should be relative to the strength of the field.”he said the reason wasa real squeeze out there onfield gas.”There’s a lot of market area gas because there’s a lot of storagegas available.”

“Adding insult to injury,” according to one trader, El Pasodeclared an unauthorized overpull penalty situation on its systemfor today’s flow, saying high demand has dropped line pack (seeTransportation Notes). This is increased pressure on an alreadyshort market in the San Juan Basin. “A large segment of the marketwent short on Blanco gas for the month either by selling Blanco andbuying Permian, or by selling Blanco and buying Rockies,” onesource said. “They were betting the basis would blow out in theaftermarket, but now Blanco gas is hard to come by and the basishas narrowed to where Blanco gas is trading almost head-to-headwith the Rockies.” Blanco gas for today’s flow was reported as highas $2.36.

Aeco prices recovered some of their Monday losses as more gaswas able to come off the over-packed Nova system, sources said.

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