With nearly all areas outside a strip along the Gulf Coast and parts of the Southwest doing some serious chilling out Tuesday, prices again made big gains. Although the Northwest relaxed a bit from the dollar-plus upticks it had seen Monday, Tuesday’s strength was more solidly based because of significantly larger advances in non-Northeast markets and a lack of weakness in the West.

New gains ranged from about 20 cents to 75 cents. The Northeast again claimed the largest ones, while most of the smaller ones of 30 cents or less were clustered in the West.

The cash market’s uprising may have been extended a bit longer by another strong screen showing. January gas futures soared again, this time recording a jump just shy of 30 cents. And while Nymex’s petroleum-related product contracts were headed south on Monday, they joined natural gas with big increases of their own Tuesday; crude oil settled just 22 cents below the $31/bbl level.

But a Midcontinent marketer dismissed the futures bullishness, saying it “all seemed technical-driven.” He saw a chance of this week’s bull run having already peaked, saying cash numbers had sold off near the end of trading, so he expects lower prices Wednesday.

Judging from the bulletin board notices about a pair of NOVA ruptures (see related story), a Calgary-based source said they could be serious, possibly affecting as much as 600 MMcf/d. But, he acknowledged, traders probably wouldn’t know for sure until Wednesday if a major supply pinch appears. “I certainly was hearing all about it on Calgary radio this [Tuesday] morning,” he added. He had expected more of a positive price reaction in intra-Alberta numbers, “but people were happy to take out of storage the way prices have spiked” recently.

A high-linepack OFO by PG&E (see Transportation Notes) did not seem to have much impact on California prices, which were much stronger Tuesday than in Monday’s tepid performance. However, a western marketer said PG&E’s OFO (SoCalGas did not issue one) was an indicator of relatively weak West Coast demand. As a result, all of her Waha deals were with intrastate Texas or Midcontinent/Midwest customers instead of sending the gas west.

She was right in the middle of the North’s frigid weather, but a Midwestern marketer reported having made no purchases either Monday or Tuesday. “Prices are just going too high, and we want to try to wait until they come down again,” she commented, adding that luckily her company had bought “a good amount of baseload” supply for December. Saying the local forecast called for an overnight low of 16 degrees, the marketer said she wasn’t sure when the weather would turn, but it looked like the Midwest will stay cold through the end of the week.

A Northeast utility buyer said her region continues to experience an off-and-on pattern of warmth and cold, each two to three days or so in duration. The variances in temperatures between these period are not all that huge, she said, but are enough to require caution in load projections. “We expect a little warmup” around Thursday or Friday, she added.

Some may prefer to disregard it entirely in light of the agency’s poor batting record lately in predicting temperatures (see related story), but…for the Dec. 8-12 workweek the National Weather Service’s outlook is for above normal temperatures across the northern third of the U.S. and dipping into the Southwest for most of the territory west of Colorado and New Mexico. It expects normal readings in most of the rest of the nation except for below normal conditions projected for the lower Southeast.

An eastern utility buyer noted that besides NWS, “we use a couple of private weather services, but they’ve been all wrong too.”

Analyst Thomas Driscoll of Lehman Brothers said he had lowered his storage estimate for the week ended Nov. 28 from a 45 Bcf withdrawal to a 30 Bcf withdrawal “due to a changed interpretation of last week’s HDDs [heating degree days].” Driscoll went on to note that storage data is getting much less bearish than it had been. “After correcting for variations in the weather we have observed that over the past four weeks net injections/withdrawals have been within about 1 [Bcf/d] from historic norms — this is in marked contrast to the roughly 4 [Bcf/d] of ‘oversupply’ that we had observed this summer.” Acknowledging that anecdotal evidence of returning demand is hard to quantify, Driscoll said he did “know that Terra Industries announced the restart of an ammonia plant in October.”

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