Coming back from last week’s late sag in values, the cash market rebounded on Monday nearly across the board, backed by the 25.2-cent bounce in November natural gas futures on Friday.

Most points across the country seemed to jump anywhere from 50 to 65 cents in Monday trading, which came in stark contrast to Friday’s action where some points dropped nearly $1. The cash market firmness could continue Tuesday if traders are still taking their cues from the futures arena. November natural gas on Monday added 26.9 cents on the day to close at $4.987 after briefly trading above $5 (see related story).

“Most points came up quite a bit on Monday. It looks like we are following the screen a little bit closer more recently,” said a West Coast trader. “We’ve also seen some generation offline down in the Southwest, which obviously brought more gas to the West Coast. PG&E Citygate, which has been strong for the last month or so, continues to be the strongest point in the West. This country is stuffed with gas and a lot of people are trading off of the futures contract, which bumped north of $5 for a time on Monday.”

The PG&E Citygate average climbed more than 60 cents on Monday to $3.75.

Addressing the significant November futures premium to the Henry Hub, which came in right around $2.10 as of the close on Monday, the trader said it is clear that something is going to have to give to bring those numbers more into line. “I think futures is going to have to be the one to come down. When you look at the current fundamentals, futures have less of a leg to stand on.”

Last Thursday the Energy Information Administration (EIA) reported that 64 Bcf was injected into underground storage, which was more than most industry expectations, but smaller than both last year’s 82 Bcf build for the week and the five-year average injection of 68 Bcf.

The trader added that the EIA’s storage reports for the rest of the month will be subject to more scrutiny than just taking the injection number at face value. “We’re likely to see some smaller injections, but that will likely be a result of storage space rather than any supply pullback,” he said. “I don’t think we have anywhere to put the stuff at this point. We are already at a record level and we are now approaching 3.6 Tcf, which is completely uncharted territory. Gas in storage is not a concern to say the least.”

The trader added that the West Coast is currently experiencing some colder-than-normal temperatures for this time of year but that forecasters expect that to change. “It is pretty chilly here right now, but it is supposed to warm up next week. We are seeing some higher gas loads due to the recent chill, but the warm-up next week is expected to stick around for the rest of the month.”

©Copyright 2009Intelligence Press Inc. All rights reserved. The preceding news reportmay not be republished or redistributed, in whole or in part, in anyform, without prior written consent of Intelligence Press, Inc.