Adding to gains achieved Monday, natural gas futures extended to new three-day highs yesterday, as traders grappled with the first onslaught of chilly weather across the Midwest and Northeast U.S. The buying pressure was evenly distributed through the trading session, leaving the November contract with a 11.8-cent gain to finish at $2.388. The entirety of the winter strip lagged the prompt month only slightly, advancing 9.2 cents to finish at $2.778.

Several traders polled by NGI were surprised by the market’s ability to post gains Tuesday following the dissipation of tropical storm Jerry and the downgrading of hurricane Iris to a tropical depression. Instead, traders seemed to refocused their attention on the cool weather that has swept across the northern half of the country this week, bringing sub-freezing nighttime temperature readings in the Midwest and snow to the mountains of northern New England. Cash prices reacted accordingly Tuesday, soaring a dime or more at many delivery points.

Looking ahead, however, temperatures are expected to moderate into next week. According to the latest six- to 10-day forecast released yesterday by the National Weather Service, above-normal temperatures are expected along the entire East Coast as well as for the state of California. That forecast is balanced, to a degree, by below-normal temperatures expected across central portions of the country from the Mississippi River to the Rocky Mountains.

However, weather watching will likely take a back seat to the latest supply data when the American Gas Association releases its latest storage report at 2 p.m. (EDT) today. Expectations ahead of that report call for a net injection of somewhere between last week’s 66 Bcf figure and 80 Bcf. “We’re still looking for a 70-80 Bcf injection and a mild bearish reaction in light of the increase from the 66 Bcf tally from a week ago,” said Tim Evans of IFR Pegasus.

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