Tuesday’s cash trading was remarkably similar to that on Monday: mixed price movement with quite a bit of flatness and rising points commanding a bare majority over falling ones. A return of chilly weather in northern market areas was the chief instigator of the market’s continuing overall modest firmness.

The gains were generally small in ranging from 2-3 cents to about 20 cents. Midcontinent and Northeast citygates tended to show the most strength.

On the other side of the price coin, western prices took most of the largest hits of up to nearly 45 cents despite near-blizzard condition in some sections. However, since most of the wintry weather would occur in sparsely populated eastern and central Montana and much of Wyoming, the impact on heating load was insignificant. But a cold front was due to return a bit of near-winter chill to the Midwest, and although the conditions would be less severe than in the mountain West, the much larger population density of the Midwest allowed regional citygates and Midcontinent points to record small gains.

The Northeast also is due to experience conditions more suggestive of the season recently ended than the nascent spring. A Canadian high-pressure system moving southward will limit highs to the 30s and 40s Wednesday in much of New England and New York state, with lows tumbling into the teens and 20s Wednesday night north of the Mason-Dixon Line, according to The Weather Channel. Meanwhile, the South will be stormy but continue to see above-average temperatures in the 70s for the most part.

Cash quotes have had no prior-day futures support recently, but will regain some Wednesday after the April contract advanced just shy of a quarter in its penultimate day of trading Tuesday.

Two ongoing issues of excess supply in western markets — Southern California Gas extending a high-linepack OFO through at least Wednesday and Kern River reporting high linepack systemwide Tuesday — were joined by Questar’s closure of its Clay Basin storage facility Tuesday to injections through next Monday (see Daily GPI, March 27), denying Rockies producers of an alternate outlet for their gas for a week.

A trader who sells gas on behalf of some independent Gulf Coast producers thought it odd that with the near-term spot market looking so bearish last week, prices are still realizing a fair amount of strength so far this week.

The trader said she has had “absolutely no problem” in finding customers for April baseload gas. Her company has finished April sales and is holding aside a little production for operational swing purposes and to sell in the daily aftermarket, she said. It didn’t see any reason to wait since everything is sold at index, she added.

She expects other bidweek activity to wind up quickly, saying that with the screen rising like it was Tuesday, “you’d think the sellers would want to go ahead” and sell April gas while the price is “still where they like it” and before it has a chance to fall. Looking ahead, she said her attitude is, “Who knows? It could be a tough hurricane season again” based on early forecasts.

The National Weather Service expects below-normal temperatures during the April 2-6 workweek in the entire Northeast and through the Upper Midwest as far as northeast Montana. It predicted above-normal readings throughout the South except for South Texas and throughout the West except for Montana and the western halves of Oregon and Washington state.

Ron Denhardt of Strategic Energy & Economic Research said he expects the Energy Information Administration to report a storage withdrawal of 18 Bcf for the week ending March 23.

©Copyright 2007Intelligence 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.