In what a Midcontinent/Midwest trader called the first “real” spell of something approximating winter that the market has seen so far this season, cash prices made a huge turnaround Monday from the serious weakness they had shown heading into the weekend. Nearly all points rose at least 30 cents, and gains of half a dollar or more were not uncommon. Appalachian pipe CNG and some Northeast citygates peaked at $3 or more, a marketer said. NGI’s Henry Hub average gained 40 cents to $2.14.

A change in weather for the colder in almost every region was the only basis for the big rally, according to a Midcontinent source, because there certainly was nothing on the Nymex board during the morning to support higher prices. Gas futures were mildly softer while most cash business was being conducted, and the heating oil and crude oil contracts dropped sharply, with crude dipping below $17/bbl at one point.

However, all three energy futures markets made substantial rebounds in the afternoon, with crude and heating oil finishing close to flat and natural gas eventually realizing a gain of 15 cents-plus. “It was a clear case of futures ‘following the cash’ rather than the other way around,” a Gulf Coast marketer commented.

Several traders agreed that the market’s burst of strength is likely to be short-lived. “It will stay cold in the Midwest through Wednesday, and then we’ll start seeing some of the same bearish weather conditions as we did last week,” one said. Another noted that Thanksgiving weekend prices should be softer, especially since it will be a four-day holiday period. Traders should be careful, though, he cautioned, “because we might catch another weather ‘pop’ towards the end of the weekend.”

The latest six-to-10-day forecast from the National Weather Service was somewhat ambivalent about supporting that last statement. It projects below normal temperatures starting Sunday in the entire western half of the U.S., but above normal readings in the populous third east of the Mississippi River, with a vertical band of “normal” weather separating the two areas.

Sources in other market areas concurred with a Northeast marketer’s observation that after beginning only moderately higher, quotes quickly gained strength that lasted through the end of trading in most cases. “[Transco] Zone 6-NYC was going for $3 and change in late deals after starting in the $2.40 area,” the marketer said. Non-New York City Zone 6 and Texas Eastern M-3, even CNG, also got to $3 or more, he added, but although the citygates held on around those late levels, CNG fell back to the $2.80s.

Naturally such volatile price movement generated large quote ranges and much overlapping among disparate markets. A Gulf Coast marketer observed that it wouldn’t have made any sense to buy Trunkline East Louisiana gas on either side of $2.40 in the late going for transport to Consumers Energy in Michigan, which failed to realize a high above $2.19. However, early Trunkline numbers in the low to mid $1.80s probably would have worked, he said.

Rockies numbers were mostly in the $1.50s and $1.60s after some pipes had fallen as low as either side of a dollar Friday, a western trader said. They got some support from a major winter storm moving into the Pacific Northwest, he went on, and also from a maintenance-related production cutback in the Jonah Field behind the Opal Hub. However, the supply outage was to be a one-day-only affair today, he said.

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