Dismissing the dominant weakness in natural gas futures late last week in favor of a prevalent chill entering the eastern half of the United States this week, natural gas cash points on Monday were higher across the board, with more than a few dollar-plus gains seen in the Northeast, Midcontinent, Rockies and West.

With real winter cold for much of the East — including the Southeast — accompanied by blustery snow storms in the Midwest, Great Lakes and Northeast, cash point averages were seeing gains across the country, with at least five Northeastern points, two Midcontinent points and 17 western points registering dollar-plus gains on the day.

The cash market will find fairly strong support on Tuesday from futures action. December natural gas on Monday climbed 22.1 cents to close at $6.533.

Cash traders have been waiting for this situation to materialize for some time. “The equation has always been about weather versus supply,” said a Northeastern trader. “The industry has been waiting for the weather to show up, but even with the colder temps, we still have to account for the healthy level of natural gas in underground stores. The question now is how cold is this winter going to get and how long will those conditions stick around?”

While storage this year is not expected to reach last year’s record high of 3,545 Bcf, the 3,467 Bcf underground as of Nov. 7 is impressive in its own right. Even after an Atlantic hurricane season that saw hurricanes Gustav and Ike have lasting effects on Gulf of Mexico energy infrastructure, storage is now only 72 Bcf less than last year at this time and 117 Bcf more than the five-year average of 3,350 Bcf.

While there is the potential for one more storage build representing the week ending Nov. 14, the week ending Nov. 21 will likely see the first withdrawal of the season if weather forecasts live up to their hype. “Arctic air spreading across much of the eastern portion of the country this week will result in the coldest temperatures since February in the major East Coast cities,” according to AccuWeather.com. “Even colder air will arrive early in Thanksgiving week.”

According to meteorologists at the forecasting firm, cold air that moved into the East over the weekend will be firmly entrenched through midweek and that the cold shot will reach all the way to the Deep South, including Florida by Tuesday. “Daytime highs will struggle to get out of the 30s, while overnight lows plunge to or below freezing,” according to Elliot Abrams, chief meteorologist at AccuWeather.com.

Marking the freeze arrival, Florida Gas Transmission (FGT) posted a potential Overage Alert Day warning to span from Monday morning to Wednesday morning at 8:55 a.m. EST. “Near-freezing weather is currently in northern Florida and cold weather is forecasted for the upcoming couple of days in northern Florida; therefore, customers in FGT”s market area are notified that there is the potential that FGT may issue an Overage Alert Day on one of the upcoming gas days,” the pipeline said in a notice Monday. “If an Overage Alert Day is issued, FGT believes there is a low probability for the need to interrupt previously scheduled market area ITS-1 service.”

The forecasting firm warned that the arctic air is trailing an Alberta Clipper system moving into the Mid-Atlantic region. The clipper will strengthen Monday night as it moves over the Atlantic; however, AccuWeather.com said it will be far enough offshore that it will have little impact on much of the Northeast on Tuesday. “The latest blast of cold air has sparked heavy lake-effect snow to the lee of the Great Lakes and more snow is on the way through Tuesday,” AccuWeather.com said.

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