The cash market kept rising in most cases Tuesday, but exceptfor some Northeast citygates with gains of about a nickel or more,quotes generally ranged from flat to only 2-3 cents higher.

With a slow warming trend starting to return in the Northeastand moderate downturns in the key energy futures contracts Tuesday,several traders expect that to lead to at least a little softnesstoday. A Gulf Coast marketer said the softness could be exacerbatedby the recent trading trend. The marketer explained: ‘he who waiteduntil late Monday paid the highest prices.’ So everybody jumped inearly Tuesday and that helped sustain rising cash prices at first.But about an hour later all the buyers had disappeared, and fromthere on cash trended lower along with the screen. Thus today’spopular strategy likely will be to hang back for a while, whichshould have cash falling, at least in early deals.

It’s developing into a very staid midweek market as HoustonEnergy Expo gets underway. Many traders are out of the officeattending the Expo; weather is generally benign almost everywhere;and the futures markets aren’t showing much volatility, sourcesnoted. An aggregator said, “We’re looking for opportunities to getin and get out of anything good while many people are occupied bythe [trade] fair, but no opportunities seem to be arising.”

PG&E citygates dropped slightly due to today’shigh-inventory OFO (see Transportation Notes). A producer thoughtRockies prices got a bit of support from Sumas shortness due to abrief outage of Westcoast’s Highway Plant. However, a marketer sawlittle impact from the plant outage but said Westcoast’s effort toraise linepack by changing imbalance tolerances to +20/0% fortoday’s gas day may have caused supply tightness at Sumas.

There was near-consensus that this afternoon’s AGA storagereport will be bearish, although some sources think suchbearishness has already been factored into trading strategies.Although he personally expects a withdrawal of up to 26 Bcf, onemarketer said he knew of some who thought injections in theproducing region could outweigh withdrawals elsewhere, causing anegative net withdrawal. Regardless, everyone was in agreement thatthe report will put a huge dent in the year-on-year storagedeficit.

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