The rebound from Monday’s price downturn bounced high above therim Tuesday as many price points experienced gains well over anickel. The upticks were attributed to a rise in the futures marketlate Monday afternoon and early evening, and a growing inclinationto buy gas for storage now before prices rise further.

Gains were highest in the Northeast with Columbia and CNGtrading in the high $2.30s. New York citygates registered similaradvances into the low to mid $2.40s. One Northeast trader said therise was caused by traders buying gas to put in the ground. “Thereis greater demand for storage gas as fields that have been restingbetween the withdrawal and injection cycles are now coming backup.”

In a turn-around that many would have believed unthinkableearlier this year, the trader added another factor pushing pricesupward is that oil has recovered to the point where industrials arefinding it economic to switch to gas. “Because of the precipitousrise in crude oil and related products, we are starting to see somefuel switching from heating oil to natural gas in the Northeast.”

Prices recovered somewhat in the Midwest after experiencinglosses between 4 and 12 cents Monday. One marketer said theMidcontinent’s Tuesday recovery, which ranged between 3 and 7cents, was related to last summer’s experience when Chicago pricespeaked in the $2.40s and $2.50s in June and July. “There is a senseof urgency to put as much gas into the ground now before prices gettoo high.”

Downed Texas nuclear plants (See DailyGPI, April 8), along with temperatures that reached the 80 degreelevel for much of West Texas, southern New Mexico and southernArizona, helped prices stay strong at many of the southern points, aTexas trader said. Waha traded in the $2.08-12 range and Katy tradedin the mid teens, representing a rise of more than 6 cents for eachpoint from Monday’s averages.

“Although those nukes are scheduled to be back in service at theend of the month, people are buying all the gas they can to make upfor them. This is still the cheapest month to buy gas, so manypeople are doing so.”

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