In a market that seems to be able to dismiss negative influences almost at will, cash prices shrugged off the previous day’s 70.6-cent screen drop and still-limited amounts of heating load to turn in a mixed performance Tuesday. Many points were little changed from flat, but gains ran as high as about 15 cents while losses topped out at nearly 20 cents.

It was easy to spot the weakest market area; nearly all western points were softer. Midwest citygates stood out on the other side of the price coin with solid increases.

Actually, heating load was rising a bit after a cold front had moved into the Midwest Tuesday, while the Northeast was also due to get a windy cold front moving through Wednesday. Snowfalls are expected to expand in the Northeast, The Weather Channel said. Mild to cool temperatures are predicted to dominate the weather picture in the South and West.

“They can’t go down forever.” That was a Canadian producer’s succinct analysis of why some firmness returned to the cash market despite the screen’s major weakness Monday and all the talk about how bearish the weather factor is. He noted that the Friday futures increase of nearly 40 cents had somewhat offset the Monday plunge. However, Western Canada weather remains much warmer than usual for January, he said. “We didn’t even get the cold December” that many U.S. markets did, he added.

February basis got a little softer Tuesday, the producer said. He was hearing Chicago basis at minus 45 cents, a nickel weaker than on Monday.

“Storage is still nearly full and the weather is warm,” a utility buyer in the South said in assessing the market, but he had no explanation for why cash firmness continues to resurface again and again when weather, screen and storage influences have been so negative for most of January. He thought the fact that the screen was able to go from a lower position early on to a positive daily gain could be indicator of it reaching a bottom for the time being.

“We have our storage [withdrawals] charted each year, and this is probably the most we’ve had [in storage] at this point in years,” the buyer continued. The situation has reached the point that his company plans to sell a package of indexed baseload gas coming under a winter term deal for February so it will be able to use more storage during the month. The sale will be at the same index, he said, so it will come out as a wash on any potential profit or loss.

The buyer said it wouldn’t surprise him at all if February futures were able to rally half a dollar between Tuesday afternoon and their Friday expiration.

The trading representative of several independent Gulf Coast producers reported having “done a bunch” of February deals already, all of them indexed or basis. She agreed with the Canadian producer that basis is looking “kind of weak” at this point. She asked rhetorically, “If everybody is going to pull out of storage next month, where is the gas going to go?” She observed that customers of salt dome storage facilities along the Gulf Coast generally have discretion to keep gas in their accounts with no seasonal withdrawal requirements, “so they’ll probably keep that $12-15 gas in storage and hope to make a profit on it eventually.”

Ron Denhardt of Strategic Energy and Economic Research expects a storage withdrawal of 88 Bcf to be reported for the week ending Jan. 20.

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