Cash prices were mixed Tuesday with some points down a dime while others were up by a similar amount, but the general sentiment in the market was moderately bearish because of mild weather conditions persisting across most of the country. Temperatures in the Midwest, Ohio Valley, and parts of the Midcontinent and South remain well above normal.

Chicago prices came in basically flat to Monday’s levels. “It’s pretty mild and there wasn’t much activity in the market today,” said a regional trader. “We’re selling a little at Demarc and shutting off transport to Chicago because it’s weak. Demarc is stronger. There is some demand in the Midcontinent and Rockies, but not much. It looks like the forecasts are going to be pretty mild so I would expect this to continue at least until Friday, when we’re supposed to see a little colder temperatures.”

A Texas marketer said he saw substantial activity at Waha early in trading, but most other trading points were quiet and flat on Tuesday. “There’s plenty of gas out there to be sold and there are some people buying it, but prices are pretty flat. I haven’t seen any big changes here today. Nymex came off pretty hard later in the day, but cash was mostly flat.

“It’s hard to say where we go from here,” he added. “I think we’ll see some more weakness, but I don’t expect the big fall-off like we used to see several years ago. People are talking about a potential for that if there isn’t any cold weather on the horizon but I don’t see it happening. There’s still an underlying supply fear out there that will prevent it from happening.”

Jay Levine of Advest Inc. seemed to concur with that sentiment. “I get the sense the world is borderline grizzly — understandably given the fundamentals as we now know them — but I’d temper any bearishness with the understanding that what got us to ‘unnaturally’ high levels [on Nymex] in the first place still exists — fundamentals or not. That something is inherent nervousness that while off-the-radar screen now, is apt to re-surface at any time.”

A Gulf Coast producer also noted that prices have slipped quite far from bidweek levels already. Henry Hub, for example, is about $1.75 less than index. “What’s amazing — and I’m sure it has angered plenty of industrials and commercial buyers out there — is that some points are nearly $2 below bidweek levels and we’re only in the first week of the month.”

Transco Zone 6 New York is trading about $2.20 less than the December baseload index. Chicago is about $1.05 less than bidweek levels. Western points were the only ones unaffected by the Nymex hysteria last week. Southern California board prices on Tuesday, for example, were trading in the low $6.30s only about a dime to 15 cents less than bidweek levels.

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