It was close to a tie, but losses appeared to slightly outweigh gains in a decidedly mixed cash market Tuesday. There were quite a few flat points also. Moderate eastern weather and bearish storage issues continued to dog the market, while prices got some support from cold and snowy conditions in parts of the West and central U.S. and a nickel rise in February futures on the preceding Friday.

Price movement ranged from about 20 cents lower to nearly 30 cents higher. Thanks to weather that currently most approximates normal temperatures for the start of January, the biggest increases were concentrated in the Rockies/Pacific Northwest/Southwest basins and Midcontinent markets. With little heating load in its primary Northeast and Southeast markets, the Gulf Coast tended to record most of the largest losses.

This week’s weather outlook is shaping up much like a repeat of the last two weeks, with cold in the West and above-normal temperatures dominant in the East. However, despite cold and heavy mountain snows due in the Pacific Northwest and Northern California Wednesday, it does not appear that a blizzard will again devastate the Rockies again. In fact, highs near to above seasonal norms will be prominent in much of the West, according to The Weather Channel.

Southern Natural Gas was about a dime lower despite canceling an OFO for long imbalances over the holiday weekend, but Pacific Gas & Electric declared a high-inventory OFO for Monday, lifted it Tuesday, then reinstated it for Wednesday (see Transportation Notes). The OFO had little impact on the PG&E citygate, which was flat.

Northern Natural Gas began reporting field supply losses on Sunday due to harsh Midcontinent/Upper Plains weather causing power losses, and was still doing so Tuesday, indicating that it didn’t have any prognosis on when the problems would be resolved (see Transportation Notes). As in the case of PG&E, Northern’s situation had virtually no effect on flat demarc and Ventura pricing.

Dominion is a representative example of how storage levels remain well above historical comparisons. Dominion reported Tuesday as of Dec. 28 the working gas inventory in its facilities totaled 250 Bcf. That compares with 221 Bcf on Dec. 29, 2005 and 224 Bcf on Dec. 30, 2004, the pipeline said.

There didn’t seem to be any cash traders having trouble with the absence of open-outcry futures activity Tuesday (see futures story), said a Houston-based marketer. The Globex on-line service apparently was a satisfactory substitute, he said. The marketer expects further softness in most cases Wednesday, saying he still doesn’t see much weather load anywhere in the East.

Nicor is still capping deliveries into its system in the new year, and thus is maintaining a premium to other Chicago-area citygates, he said.

A generally bearish weather outlook for gas prices is persisting into the new year. The National Weather Service’s (NWS) six-to-10-day forecast for the Jan. 8-12 workweek calls for above-normal temperatures everywhere east of a line that runs southwestward through central Minnesota, then roughly parallels the western boundaries of Iowa, Missouri and Arkansas before curving slightly southeastward through western Louisiana. Temperature variations above normal will be greatest in the eastern Midwest, most of the Northeast and a good portion of the Mid-Atlantic, NWS said. It expects below normal readings in Oregon, Washingon state, Idaho and Montana, along with the northwest half of Wyoming and the northernmost sections of Utah, Nevada and California.

Making the forecast even more bearish is the fact that the above normal area is mostly heavily populated and contains major gas-consuming regions, while the below normal area is relatively sparsely populated for the most part.

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