Unlike the previous post-weekend resumption of trading, Monday’s cash market acknowledged the bearish weather and storage fundamentals that have dominated January so far with declines across the board. In the process prices ignored the support of Friday’s screen gain of 37.5 cents, but on Tuesday they are likely to heed the negative influence of the February futures contract’s plunge of 70.6 cents Monday.

Losses ranged from 20 cents to about 70 cents. The amounts of decline were fairly well mixed across geographic market areas, but tended to be bigger in the Northeast and smaller in the West.

Arguably there was a case for some firmness to show up again, as it did for much of last week even when weather fundamentals were weaker than they are at the start of this week. The Midwest will be invaded by a blast of Canadian cold air Tuesday that will bring snow and have daily highs ranging from the 20s in parts of the Dakotas and Upper Midwest to the 50s in the central Plains, Missouri, lower Ohio Valley and Kentucky, according to The Weather Channel (TWC). However, the same range of highs will be in effect from northern New England through the lower end of the Northeast, but those will still be above seasonal means, TWC said.

Other than drier conditions in the upper West, the same moderate forecasts as last week’s will apply in the West and South, with freezing temperatures confined generally to the Rockies and other mountainous locations of the West and essentially nonexistent in the South.

With the petroleum-based futures products starting to retreat Monday and unable to offer a leg up for the natural gas screen as they did last week, the February gas contract went into a tailspin. Although further issues were being added to the global supply concerns of oil traders (see futures story), a broker was uncertain about whether a natural gas futures bottom had been established yet.

The role of storage remains a topic for debate. Even forecasts for colder weather returning in February may not make up for the large volumes of storage gas that must be used between now and the end of March, one source said.

Prices are obeying fundamental weakness for now, said a Houston-based marketer, “but I think it’s only temporarily before we get another run higher.” Some people are probably thinking, “Hey, it’s a good time to buy gas” now that prices have gone a lot lower, he added. And then there might be others anticipating problems with summer supply after the devastating hurricane season of 2005, which some forecasters expect to be repeated to some extent this year, he said.

Those traders who are able to leave storage volumes in place, such as many Western Canada producers, have an advantage in flexibility over those who are forced to cycle their accounts in and out each year, the marketer continued.

He said the current anticipation for February is that it will be colder. After all, he said, things tend to average out over time, so after a mild November and January in the current heating season the climate is probably due for some “correction back to the cold side” next month.

The marketer reported hearing early February basis talk of the Chicago citygate at minus 40 cents and MichCon at minus 14 cents. Dominion South Point was being bid at plus 31 cents and offered at plus 36.5 cents Monday, he said.

Citigroup analyst Kyle Cooper said his final estimation of the storage report for the week ending Jan. 20 calls for a withdrawal of 82-92 Bcf.

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