With little to no direction from the natural gas futures market on Monday, which gained a mere penny, cash market traders on Tuesday were left up to their own devices. While most cash market points posted small gains on the day, the Northeast region recorded some significant drops as weather and temperatures relaxed.

The average price at Midcontinent points increased from a few pennies to as much as 14 cents, while a number of West Coast points increased in the neighborhood of a dime. In the Rockies, points recorded small gains and small losses. However, the real action on the day occurred in the Northeast, where cash point averages came off following a couple days of steady gains that coincided with wintry storms.

“Prices were settling down Tuesday right along with the weather,” said a Northeast trader on Tuesday. “With temperatures coming back to pretty much normal for the season, that took a lot of the generation off-line and scaled back the retail loads and prices followed. A lot of the restraints and restrictions that have been on the pipes recently are also coming off, so more gas plus less demand equal lower price.

After staging impressive run-ups in previous days, Transco Zone 6 NY and non-NY posted drops of $7.89 and $2.56 to average $13.29 and $8.84 for Wednesday delivery. Algonquin citygate dropped $8.84 to average $11.24.

Heading into the latter part of December, the trader added that storage is still a nonfactor. “Storage is still full, so there are no real concerns there as of yet.” As of Dec. 7, working gas in storage stood at 3,294 Bcf, which is 32 Bcf higher than last year at this time and 259 Bcf above the five-year average of 3,035 Bcf.

Looking at cash prices moving forward, the trader said he sees prices holding fairly steady in the near term. “For the balance of the month, I think cash points are going to trade right around where they normally do during this time of year,” he said. “As we get closer to Christmas, we see lighter loads, especially because we are going to have warmer weather this year again. The hype and hysteria are over for now, so we will have to see what happens in January.”

Looking at the end of December, it appears that some significant warming is on the way. According to the National Weather Service, the eastern two-thirds of the United States is expected to exhibit above-normal temperatures from Dec. 26 through Jan. 1. The remaining third will see normal temperature conditions while Alaska will experience below-normal readings.

Cash traders will have a bit of strength in the futures market to go off of in Wednesday’s trade. On Tuesday, January natural gas futures climbed 10.6 cents to close at $7.141, which is right in line with the current Henry Hub average. On Tuesday, the hub added 9 cents to average $7.16.

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