Physical natural gas cash points rose virtually across the board in Tuesday’s trading for Wednesday delivery. The overall rise was a dime on average, but if super-size gains on pipes such as Algonquin, Iroquois and portions of Tennessee in the Northeast are excluded, the average national gain still came in at 8 cents.

Near-term cooler weather forecasts fueled much of the rise, and at the close of futures trading April had slipped a miserly 0.4 cent to $3.645 after reaching another yearly high at $3.676. May eased 0.5 cent to $3.684, and April crude oil rose 48 cents to $92.54.

MDA Weather Services in its morning one- to five-day forecast shows below-normal temperatures traversing a broad fairway extending from North Dakota and Michigan on the north to Alabama and South Carolina at the southern end.

Forecaster Wunderground.com reported that across the Great Lakes, cool and unsettled conditions could be expected. Milwaukee, WI’s high of 36 Tuesday was forecast to drop to 30 on Wednesday before rising to 39 on Friday, still 2 degrees below the normal high. Detroit’s Tuesday high of 39 was anticipated to slide to 37 Wednesday and rise to 45 by Friday. The normal high in Detroit this time of year is 42. Chicago’s high Tuesday of 41 was expected to fall to 36 Wednesday and reach 43 on Friday. The normal high in the Windy City is 45.

The National Weather Service in Chicago said a “deep trough over the upper Mississippi Valley [Tuesday is] supplying a nice feed of chilly air by March standards. A fairly vigorous small air flow pivoting around the trough into northern Illinois this afternoon [is] providing support for scattered…fairly convective snow showers.”

Marketers in the Great Lakes are having to pay higher prices as winter continues to linger through March. “We lost a good portion of our snow on Sunday and Monday, but now it is supposed to get colder,” said a Michigan gas buyer. “We had to pay $3.905 for gas on Consumers, but we haven’t had to buy too much at the higher prices just yet. We continue to draw down our storage, and this is definitely different from last March. Some are saying this is below average.”

At the Chicago Citygates, gas for Wednesday delivery came in 11 cents higher at $3.86, and deliveries on Michcon were six cents higher at $3.86 as well. On Consumers next-day deliveries were seen at $3.90, up 10 cents, and on Alliance packages for Wednesday were seen at $3.86, 10 cents higher. Buyers at Dawn were paying 4 cents more at $3.97.

In the Northeast, next-day prices surged as volatile next-day power prices provided all the incentive necessary to lift spot gas prices. IntercontinentalExchange reported that Wednesday real-time power delivered to the New England Power Pool’s Massachusetts Hub added a healthy $6.41 to $50.23/MWh, and real-time power into PJM West added $4.17 to $42.31/MWh. At the New York Independent System Operator’s Zone G (eastern New York) trading point, however, next-day power skidded $10.51 to $48.58/MWh.

Quotes at the Algonquin Citygates rose 66 cents to $5.80, and deliveries to Iroquois Waddington added 57 cents to $5.22. On Tennessee Zone 6 200 L Wednesday parcels added 81 cents to $5.83.

To the south on Tetco M-3 gas was seen at $3.97, up 16 cents, and on Dominion Wednesday deliveries rose 13 cents to $3.78. Gas destined to New York City on Transco Zone 6 added 13 cents to $4.00.

Other market centers posted healthy gains as well. At the Henry Hub, Wednesday packages traded at $3.71, up 7 cents, and on El Paso Permian, next-day deliveries were seen at $3.55, 7 cents higher. On Panhandle Eastern, gas for Wednesday delivery added about a dime to $3.61. At Opal, next-day packages were quoted at $3.58, up 4 cents, and at SoCal Citygates gas for Wednesday was at $3.86, a penny higher.

The new high in the April contract at $3.676 but subsequent easing to settle at $3.645 hasn’t clarified the technical picture. From a technical perspective, the April contract is at an inflection point where it could go either way. Walter Zimmermann of United-ICAP in a weekly report said “natgas rallied to within one cent of the prior high at the $3.645 level. If natgas reverses lower on Monday, we will have a double top.”

The market seems to be keeping its intentions disguised. Prices were only able to inch higher Monday and close fractionally above technical objectives. Tuesday registered a small decline. “If instead natgas can break above $3.645, then our target will become the bullish case target outlined [earlier]. That would be the $3.720 to 3.745 zone,” said Zimmermann.

Tim Evans of Citi Futures Perspective sees “the potential for prices to work higher into the $3.70-3.80 range based on [his storage] outlook.” He calls storage “supportive, at least on a seasonally adjusted basis, with above-average net withdrawals likely to continue through the end of the month.”

For Thursday’s storage report for the week ending March 8 he calculates a 139 Bcf pull, well above last year’s 66 Bcf withdrawal and a five-year average of 74 Bcf. By the end of March, the year-on-five-year surplus is down to 65 Bcf, according to his figures.

He sees some “fundamental tightening on a seasonally adjusted basis” taking place and this trend “as holding off the bears for now, although we also anticipate a test of the downside once heating season fades away.”

Funds and managed accounts seem content to play the market from the long side. In its most recent report the Commodity Futures Trading Commission in its weekly Commitments of Traders report for March 5 showed a big shift to the long side and exit from the short side of the market by managed money.

At the IntercontinentalExchange managed money added 13,969 long futures and options (2,500 MMBtu per contract) to 255,904 and reduced short futures and options by 1,967 to 51,857. At the New York Mercantile Exchange, managed money added long futures and options to the tune of 10,365 contracts (10,000 MMBtu per contract) to 227,761 and reduced short holdings by 22,823 to 258,817.

When adjusted for contract size, long futures and options at both exchanges increased by 13,857 and short positions contracted 23,315.

Overnight forecasts turned cooler in the short term. WSI Corp. in its six- to 10-day outlook said Tuesday’s “forecast is a bit colder over the north-central U.S. when compared to [Monday’s] forecast.” The forecaster had “increased confidence of colder temperatures there due to recent trends in the latest GFS model guidance with a developing low pressure over the Southern Plains.”

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