Increases of more than a nickel dominated the cash marketyesterday as strong demand and chilly weather in core populationareas mixed with a surging futures screen to produce bullishresults. While many traders were surprised to see prices at theircurrent levels, they also agreed that this bull run does not appearlikely to go away any time soon.

“If you told me that I was going to see $3 Sonat gas in Aprilearlier this year, I wouldn’t have believed you,” said a Southeasttrader. “That being said, Sonat traded above $3.10 [yesterday], andI don’t see it falling below $3 for the rest of this month.” Headded that while Sonat is strong, Henry Hub prices are still at asmall premium because more people baseloaded Sonat during the lastbidweek.

The Waha-Southern California border spread has closed to threeor four cents, whereas it was 12 to 15 cents earlier this month, awestern marketer said. Waha jumped above the $3 mark yesterday.”That’s just the way the gas is moving,” he said. “There is strongdemand for western gas to flow east.” PG&E citygate prices wereamong the strongest yesterday, as they moved into the mid $3.10s.

Despite the rises, another trader said California prices areunder pressure because gas-fired generators in the area are comingout as sellers. They are finding it more economic to shut off theirplants, buy their power on the open market and sell their gas.”With off-peak power prices in the $20/MWh area it makes sense.” Headded that there seems to be an abundance of hydro-power on themarket, which could also serve to lower gas prices.

With no major influences to report in the region, Rockies pointstrended higher with the Midcontinent, one source said. She addedthat Opal opened in the mid $2.70s and rose throughout the day.

All points in the Gulf Coast were humming, a source there said.He lamented selling a slew of positions early in the morning whenprices in the region had risen just more than a nickel. After that,they continued their ascent and most of them finished the daytrading higher than where he pulled the trigger.

There was a chill in the air for most people in New York andMassachusetts yesterday, and that was expected to continue throughtoday before warming tomorrow. Both New York City and Boston, MA,fell into the high 30s yesterday. These chilly temperaturescontributed to the strong rebound in the Northeast, where mostpoints experienced large gains between a dime or two after fallingon Friday. A Northeast marketer said Transco Zone 6 (New York)traded in the mid $3.50s and Tetco M3 traded in the high $3.40s.

“Forget injections in the Northeast, they can’t even stopwithdrawing gas,” he said. “Storage numbers will be interestingthis week and next. This market will be lucky to show small netinjections over the next few weeks [and not withdrawals].”

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