Normalizing weather caused cash prices at most points to drop afew cents to nearly a dime yesterday with the Chicago pointsaccruing the largest losses, but the downturn failed to abatemarketers’ optimism, which was buoyed by a new six- to 10-dayforecast calling for below-normal temperatures for a large portionof the nation.

After reaching the high $2.20s on Friday, the Chicago Citygatetraded down 12 cents Monday. While only experiencing 40-degreetemperatures last weekend, Chicago reached 50 degrees yesterday andis expected to climb into the mid-60s by Wednesday. OtherMidcontinent and midwestern spot points lost ground as wellyesterday, falling six to eight cents.

Although warmer weather may have caused a drop yesterday, oneMidcontinent marketer said it will give prices an upward push inthe very near future. The National Weather Service (NWS) isforecasting below-normal temperatures for much of the Midcontinent,including the Mississippi and Ohio Valleys, and the entire EastGulf region.

“In general, I think prices will not only rise due to the lowertemperatures, we could see some real spikes. The whole market isstorage-driven. Right now some people think we’re in an injectionseason, while others think it’s still withdrawal season. If thisforecast holds up, the two upcoming AGA reports will show adwindling injection amount and might even cross over into awithdrawal situation. This could cause some confusion at somefacilities, and I wouldn’t be surprised to see some [price]spikes.”

“This market is getting into its roller coaster stage again,”said a Gulf Coast trader who saw waves of buying and sellinginfluence prices in both directions Monday.

In the West, California prices stayed flat or gained a penny,bucking the downward trend. One source said western price firmnesswas due mostly to higher electricity prices. He heard California PXwas selling in the mid $20/MWh range but then popped up to the $40level.

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