Traders cited new forecasts of colder weather, both near-termand intermediate-term, as the chief instigator of yet anotherreversal in cash market direction Thursday. Nearly all pointsrecorded strong gains between about a quarter and 60 cents.California was the conspicuous exception with further largedeclines, but it remained the most expensive market by far.

A second day of firmer futures lent some support to cash, aHouston-based producer said, but a snowstorm due to move into thenation’s midsection by today, along with snow and frigidtemperatures returning in parts of other regions, drew more traderattention.

In addition, the latest six-to-10-day forecasts from theNational Weather Service and a private weather consulting firm aremuch more bullish than the ones earlier this week, he said. NWS isprojecting normal to below normal temperatures for the first fewdays of February everywhere except in the sparsely populated UpperPlains and the New England/eastern New York section of theNortheast. And “normal” for early February usually means fairlycold weather, the producer said.

Another Texas trader saw a more subtle reason for fresh pricestrength: “We’ve hit a level where buyers are willing to buyagain.” He also noted that processing is starting to become morefashionable again following a period of economic doldrums.

When shut-down processing plants weren’t taking their shrinkageout of gas, it was almost the equivalent of having 10-15% extrasupplies in the market, he said. But that excess will get takenback out as the plants gradually resume operations, he said.

Producers have very selective memories, the trader continued.”They don’t want to remember the $2-3 gas but remember very wellthe $9-10 gas. So now that prices are around $7, they think it[market] should go up again.”

Bidweek got off to a quiet start, which certainly isn’t unusual.Several sources indicated they expect a lot of people will want towait until Monday or later to do most February business becausethey’ll have fresh weather forecasts and the screen settlement towork with then.

Everybody’s talking index so far, with no fixed prices andlittle basis surfacing, according to a western marketer. He washearing a Southern California border range from GPI’s index minusone to index plus 20.

Another source reported an electronic trading service offeringChicago bid-ask basis of plus 1-3 for Nicor but minus 7-5 forPeoples. Peoples basis tends to be weaker because it has aconsiderably higher percentage of residential load behind itscitygate, he said.

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