Cash prices rose by a nickel to a dime virtually across theboard Monday in what sources saw as “purely a weather play.”Liquidity was a bit tighter than usual as many traders hurried tofinish and head for this week’s trade fair in Houston, one pointedout. Also, a fair amount of gas had already been committed throughthe end of the fair, he said.

Although most increases were in the neighborhood of a dime, Wahasaw much more strength than that based on cold temperaturespervading Texas and continuing strong demand from the West. Anumber of Texas utilities that had been noticeably absent from themarket recently were out buying peaking loads, one trader said.That caused Waha in the low to mid $2.20s to command a premium overKaty, he added.

A marketer who saw Permian gas jump about a dime into the high$2.10s thinks the strength will last at least through today. Healso had the perception that people had underbought gas for theweekend because prices didn’t fall as expected, and Monday thosepeople were playing catch-up.

“Nobody really saw this coming,” a Texas trader told Daily GPI.”You couldn’t give your gas away on Friday and today [Monday] youdon’t have enough. We knew that cooler weather was to arrive earlythis week, but it was not supposed to be this cold this far south.”

A Sonat OFO that takes effect today (see Transportation Notes)had little effect on prices there, said a producer selling intoSonat at $2.16-18. “Now if people start buying 5 MMcf/d and pulling10 MMcf/d, then we will have a problem.” A good place to haveLouisiana gas Monday was NGPL, which uncharacteristically wastrading about even with Henry Hub and Sonat, he said. NGPL gas wasfinding its way north “to the really cold market areas,” theproducer said.

A marketer whose Chicago citygates were up about a dime to thelow $2.30s said he understood that NIPSCO was the region’ssupply-short LDC, “and when it (NIPSCO) runs, that will hold upprices into NI-Gas.”

One source thinks there is enough cold weather left to keepprices on the rise today. However, a marketer found it ratherironic that gas prices were moving up even as crude oil continuedto slip to about $14/bbl. Gas will find it difficult to go muchhigher considering the alternative fuel’s cheapness, he said.

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