Some market areas -- such as from the Rockies and Western Canada through the Upper Plains and Midwest into the Northeast and Eastern Canada -- had enough cold weather to justify the hefty price run-ups in Monday's trading. Although some parts of the eastern South and Southwest would see lows approaching freezing Tuesday, their highs close to 50 or above made it a bit harder to rationalize their sizeable gains.

Nevertheless, quotes recorded at least double-digit increases across the board, and some in the Northeast exceeded the dollar threshold even with The Weather Channel predicting only a "weak eastbound clipper storm" moving across the region.

The previous Friday's 6.7-cent uptick by February futures and the return of industrial load from a holiday weekend provided modest extra boosts to the cash market Monday.

Cash traders can count on much more significant prior-day screen support Tuesday after the colder forecasts for early January propelled the February contract to a gain just shy of a quarter (see related story).

CIG had ended a Strained Operating Condition over the weekend, but other cold weather-related pipe constraints were still around. Both Northern Natural Gas, which had initiated a System Overrun Limitation Saturday, and PG&E, which declared a systemwide high-inventory OFO Monday, kept their restriction in effect. Transwestern and the Southwest Gas LDC, also were acting to avoid low linepack.

Despite PG&E issuing high-inventory OFOs for Monday and Tuesday (see Transportation Notes) and citygate quotes for Tuesday flow rising nearly 35 cents over Saturday-Monday numbers, citygate trading volumes on IntercontinentalExchange (ICE) plummeted from 1,005,100 MMBtu in weekend activity to only 542,900 MMBtu Monday.

It was already cold Monday in her area, said a Midwest marketer, and even colder conditions were in the late-week forecast. Her company is having to make some tougher decisions than usual this year on using storage, she added. Previously when more people were predicting a relatively moderate January and February, it seemed a natural choice to pull more out of storage during a cold blast like the current one. But now there apparently is some doubt creeping in about whether January and February will be as mild as first believed, she said.

Things were simpler for a utility buyer in the South, although he considered that "pretty seasonable" temperatures between 30 and 50 in the utility's service area didn't seem to justify Monday's big price increases. At least it's giving the company a chance to ease back on storage use, which had been heavier than desired at times during a very chilly November and December, he said. And since it bought a little more baseload gas for January than usual, it shouldn't have any concerns about possibly emptying storage prematurely.

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