With Monday’s 78.5-cent futures spike (and a further sizeable screen increase early Tuesday) giving added impetus to the cash market’s reawakened bullishness based on new forecasts of widespread cold weather later in the week, spot gas quotes realized even larger gains Tuesday than they had the day before in most cases.

Whereas scattered triple-digit increases had been in the minority Monday, they were in a very solid majority Tuesday. Overall upticks ranged from a little less than 85 cents to around $1.30. Most of the sub-dollar gains were concentrated in the Rockies/Pacific Northwest, San Juan Basin and California.

This week’s two-day run-up took Gulf Coast points, all of which had averaged less than $4.50 last Friday, to $6-plus averages Tuesday in all but a couple of cases. And every point in the overall cash market was trading at a triple-digit premium to its first-of-month index. Only a few were less than $2 above index.

Malin and the PG&E citygate once again managed to defy the normally price-deflating impact of the utility’s declaring a systemwide high-inventory OFO for Wednesday (see Transportation Notes) with increases of about 95 cents and 85 cents respectively.

The impending boost in heating load may be coming just in time to avert serious problems for some storage facilities. Withdrawals are occurring at several facilities across the country, reported the Bentek Energy consulting firm (see related story). But Bentek’s data shows that a sizeable number of sites are either already full or very close to it, and in a few cases have even more working gas stashed away than their nameplate capacity.

Although the screen showed initial strength Tuesday morning, it fell as the day went on to a closing loss of 0.2 cent to $6.442. Combined with Henry Hub’s advance of a little more than $1.10, the cash-futures spread narrowed hugely to about 18 cents. The Hub’s deficit to the screen had been $2-plus as recently as Oct. 6.

Other areas likely will have to wait another day or two before severe cold reaches them, but temperatures will be dropping quickly behind a cold front that is expected to have penetrated the Upper Midwest and Plains states Wednesday. The northern Rockies will be experiencing snow showers and freezing conditions Wednesday, according to The Weather Channel. By Friday the National Weather Service looks for nearly all of the U.S. except for the West Coast and peninsular Florida to have below normal temperatures.

“I don’t know what to make of this market,” said a Midwestern marketer, indicating that he didn’t see the fundamentals supporting two days of cash spikes. It seems like “irrational panic” is part of it, he added. Sure, it’s getting cooler again, he said, but the big boost in heating load will not arrive until later in the week, and even then it won’t be all that terribly cold.

Noting the screen’s retreat to a slightly negative position by the end of Tuesday, the marketer said prices were going down in late cash deals, which often points out the direction of next-day price movement. Sure enough, the marketer said, he was seeing Henry Hub being offered late Tuesday afternoon at $6 for Thursday flow, which would be down about a quarter from Tuesday’s Hub average.

The National Weather Service (NWS) expects cold weather to continue next week in most of the U.S., although a large portion of the West will get a break from the cold. The agency’s forecast for the Oct. 23-27 workweek calls for below normal temperatures everywhere (except peninsular Florida) east and north of a line running southeastward from eastern Washington state through southwest Idaho and the central portions of Utah and New Mexico before turning east through central Texas and southern Louisiana, then moving slightly offshore from Mississippi and Alabama before including the Florida Panhandle. The biggest deviations from normal are predicted for the central Midwest. Most of the West is due to see normal conditions, NWS said. The only area where it looks for above norrmal temperatures is in most of Northern California.

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