What was supposed to be a rather bearish week, based on previous forecasts of above normal temperatures throughout the eastern half of the U.S., instead saw substantial price upticks nearly across the board Tuesday. Sources credited a second day of screen strength, anticipation of another report of storage withdrawals — and oh yes, vestiges of the 2002/03 winter that seems to have more lives than a cat — as the key drivers of the cash market.

The natural gas screen tacked on another dime to Monday’s gain of about 14 cents, but it wasn’t alone in the energy complex with another consecutive day of upward movement. The crude oil and heating oil contracts, seemingly less affected by Iraq war news in recent days, rose again on reports of outages at a Texas refinery and a Canada-U.S. oil pipeline.

For one Canadian producer, the screen was almost the entire story behind Tuesday’s cash advances that tended to exceed 20 cents at the great majority of points. Even with such physical strength, he considered cash “kind of weak relatively compared to Nymex,” pointing out that Chicago citygates in the high $5.40s were about 15 cents behind gas futures and that Henry Hub in the low $5.50s also handily lagged behind.

Other traders also acknowledged the screen’s influence, although as a Midwest marketer observed, “I think I’d have better odds at the craps table than trying to predict futures.” But for him storage demand was a major factor in Tuesday’s bullishness. “That [storage] is what a lot of my customers tell me they’re buying for.” Worries about refilling inventories before next winter are resurfacing since EIA is expected to report Thursday an even bigger withdrawal than last week’s 9 Bcf, the marketer said. But he added, “One thing I think I can safely predict” is that because of so little weather-related load this week, next week EIA “should have a huge injection number.”

Yes, little heating demand was expected to be still around at this point, but forecasts don’t always pan out. Freezing precipitation is due Wednesday over the Upper Plains and Upper Midwest as what The Weather Channel called “a rather robust Plains storm butts heads with a polar air mass standing its ground over central Canada.” And the Northeast’s touch of spring Tuesday appears destined to be briefer than area utility buyers had hoped. A cold front is expected to occupy the upper parts of the region Wednesday morning and reach the southern portion by that night.

After recording major advances of around a dollar in lockstep with San Juan Basin Monday, the Rockies slid Tuesday even as San Juan gas soared with the day’s largest upticks. The Cheyenne Hub even recorded a modest loss. “I thought the Rockies would have been feeling more demand by now” from a winter storm pushing eastward from the West Coast, a western trader said, “but I guess it wasn’t that much after all.” Rockies supplies also are still hampered by El Paso maintenance in its San Juan-Bondad pool, which helped bolster buying in the San Juan-Blanco pool, he added.

The outlook for next week is fairly bearish, according to the National Weather Service. Its forecast for April 21-25 sees below normal temperatures only in the southwest corner of the U.S., with above normal predicted for the Upper Plains, Midwest and Northeast. The rest of the nation should be normal, NWS said.

However, the “taste of spring (east) and taste of summer (central) are about to come to an abrupt end,” consulting firm Weather 2000 said in a Tuesday advisory. “New Yorkers were treated to 80-degree temperatures today [Tuesday] and the Central Plains pushed 90 yesterday [Monday], but all that is coming to a quick demise, with high temperatures 40 degrees cooler a mere three days later. It is not surprising that the warmest actual readings occurred in the heartland of the nation where surface/soil conditions have been so dry. This surface-air positive feedback mechanism will play an increasingly larger role as we approach the heart of summer…[T]he brief periods of heat this spring across the nation are offering obvious clues as to where the greatest chances of heat waves and sustained warmth will occur this summer…

“Our advisory last week of a rather cool and damp eastern half of the nation setting up for late April and into May has gained higher confidence this week. Our research indicates that a propensity for storm tracks and closed-off low pressure systems will congest the central and eastern states, with subsequent clouds, rain and moisture keeping temperatures unseasonably cool. This will essentially clinch yet another below normal temperature month (in some cases [the seventh] consecutive such cool month) for locations in the East, on target with our cool spring/summer outlooks. There will be some sub-regional exceptions to this which will continue a tendency for warmth, but this will occur in low-population-density areas of the High/Northern Plains, and Canadian border regions of the Upper Midwest.”

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