Despite fundamental support having virtually disappeared, most of the cash market outside the Rockies managed to hang tough for at least one more day of firmness Tuesday, but new price advances slowed almost to a crawl. Non-Rockies quotes tended to range from flat to no more than about a nickel higher, with most points averaging gains of 3 cents or less.

For a change the screen was a negative influence, trading more than a dime lower at times during the morning. However, its climb back to a flat close in the afternoon gave cash traders more food for thought as they tried to discern whether the recent price run-up had run out of steam or still had some stamina left. A Gulf Coast marketer thought the futures recovery indicated that cash would be able to remain at least flat to a bit firmer for a while longer. However, he conceded that weather is remaining a non-factor in the market, and he was seeing “very little” utility demand.

The big variation from the overall market came in the form of Rockies prices diving by around 20 cents or more. The region was joining most of the rest of the nation in enjoying near-springlike temperatures. But one western trader said much of the price weakness was related to Kern River’s two-day Muddy Creek outage starting today, “which means Opal, CIG and Northwest can’t feed any gas into Kern River.” That in turn limits where Opal gas that is not being constrained this week by maintenance can go, he said.

The cutback on Kern River deliveries likely was responsible for keeping California and San Juan numbers flat, another source said. And other than snowy conditions in the northern reaches of New England and the Upper Midwest, the Pacific Northwest was one of the few cold markets remaining. The heating demand there allowed Sumas and Stanfield to limit their losses to about a nickel, much less than points in the neighboring Rockies.

A Northeast trader said he was unable to get any citygate deals done Tuesday, noting that production area prices were too high for transportation economics to the market area to work.

It was difficult to discern a definitive trend as trading proceeded, two marketers said. The one who works Midwest citygates said his numbers started strong, fell off, then rallied. But the other reported that Midcontinent production area prices traded down from about 7:30 a.m. CST to 9:30, rallied until about 10 and then resumed a mildly softer bent.

Today’s AGA report may hold the answer to whether higher prices are achievable, although the afternoon report will come too late to provide any guidance to the morning’s cash activity. Analyst Thomas Driscoll of Lehman Brothers is looking for a fairly bearish storage pull of 110 Bcf, but other reports Tuesday had expectations strengthening to a range centering around 130 Bcf, close to last week’s report volume.

Allowing that it “could just be a rumor,” one source said he was hearing there are “some bogus numbers” in the AGA report. “Traders are a little anxious” about that, he said.

One source recalled an old market quote: “Price creates its own reality.” All opinion leaders are assuring everyone that the economy is coming back strong, and it’s been established that production area deliverability has tightened considerably over the past year due to drilling cutbacks, he said. With people talking about these factors being why prices can get so high even while fundamental influences are negative, “you just have to go along that what they say is correct.”

“All of this uneasiness in the Middle East and around the world is keeping the pressure on energy prices,” a Gulf Coast marketer said. “Nobody wants to be short.”

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