If you don't like the direction of natural gas cash prices, wait a day and they'll likely change. Such was the case during the first two days of the week as Monday's across-the-board gains were wiped out by Tuesday's across-the-board declines.

Cementing the "oppositeness" from the previous day's trade, Northeast cash point averages, which saw the largest increases on Monday, saw the largest pullbacks Tuesday as early spring-like weather continued to settle in. While most cash points in the region came off by less than 20 cents, some points, such as the Algonquin Citygates, dropped by 30 cents or more, according to IntercontinentalExchange data.

The rest of the country mostly posted declines of around a nickel to just shy of 20 cents. Some of the smallest drops were seen in the West, where most averages shifted lower by less than a dime.

The overall health of natural gas trade and marketing in North America appears good. According to the just released NGI's 4Q2010 Top North American Gas Marketers Ranking, the 24 marketers that participated in both the 4Q2010 and 4Q2009 surveys reported a total of 135.83 Bcf/d was transacted in 4Q2010, an 8% increase from 126.08 Bcf/d that switched hands in the year-ago period. BP, Shell Energy North America and ConocoPhillips continued to lead the rankings (see related story).

Looking at Tuesday's activity, Citi Futures Perspective analyst Tim Evans said it appeared that natural gas got caught in the "broader commodity downdraft" overnight and into Tuesday morning as Japan's situation appeared to grow less stable by the minute. After reaching a low of $3.800 at Tuesday's regular session open, April futures rebounded higher, putting in a high at $4.004 before closing the day's regular session at $3.941, up 2.7 cents from Monday.

"This is possibly more a case of buyers being preoccupied by other developments across a range of markets as opposed to anything else," he said. "Temperature forecasts were slightly cooler in the six- to 10-day period and warmer in the more volatile 11- to 15-day outlook compared to Monday."

Taking an early peak at Thursday morning's natural gas storage report, traders and analysts alike are wary of getting burned again this week. Last Thursday the industry, which had been expecting a withdrawal in the high-70s Bcf to mid-80s Bcf, was surprised when the Energy Information Administration (EIA) revealed that only 71 Bcf was withdrawn for the week ending March 4 (see Daily GPI, March 11).

Following another week of fairly mild temperatures in a number of regions, industry observers have further reduced their withdrawal expectations for the week ending march 11. Evans said his early prediction is for a 53 Bcf draw, which would be much larger than last year's date-adjusted 25 Bcf draw for the week, but just below the five-year average draw for the week of 58 Bcf.

Other industry insiders are expecting an even more anemic withdrawal when the EIA releases the data at 10:30 a.m. EDT. "We expect EIA to report a 40 Bcf withdrawal for the week ending March 11, bringing total working gas in storage to 1,634 Bcf, or 17 Bcf above last year's level," wrote Credit Suisse analysts Hugh Li and Stefan Revielle.

They pointed out that heating demand decreased slightly week over week as U.S. cumulative heating degree days (HDD) fell by 7 HDDs, or 5%, to 141 HDDs for the week ending March 11, consistent with average demand levels for the reference week. Li and Revielle believe "warmer temperatures in the Northeast and Midwest" will contribute to a lower week-over-week storage withdrawal.

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