Cash prices kept climbing higher Tuesday, though not at thedazzling rate of Monday’s run-up. New gains of 20-40 cents at manypoints were still pretty impressive, though.

The colder weather that is generating such a big reversal ofcash market fortunes this week was reaching the upper East CoastTuesday and pushing Northeast citygates over $2, although somequotes were as low as the $1.80s. New York City-area deliveries inTransco Zone 6 remained about 25 cents or so above non-New Yorkdeals. In an about-face from the usual procedure, utilities in themetropolian area that had gas to spare from unneeded baseloadsupplies earlier in the month were selling to marketers and makingthem pay up, one source said. Another source agreed, sayingmarketers shorted Transco Zone 6 NY, thinking they could use non-NYsupplies. But access to non-NY supplies has been limited and thathas forced them to pay a premium for NY deliveries.

Chicago-area industrials really backed off their loads aftercitygates got above the $1.90s, a Midcontinent marketer said. “Someof these Chicago buyers think that because storage is so full andadditional [Northern Border] pipeline capacity is due to comeon-line at mid-month, $1.75 Chicago gas is their new birthright,”he added somewhat sarcastically.

Price ranges continued to be volatile. A producer reportedPanhandle Eastern starting in the mid $1.60s and racing up to thehigh $1.90s, “but then things backed off dramatically.” He figuredthat when prices drew approximately even with the futures screen,it made sense for buyers to switch to storage gas, effectivelycapping any further rise in field numbers.

Though she heard of a “tiny” falloff at the end, a marketerfound El Paso-Permian rising by a dime through the morning from herearliest purchase at $1.87. The West is still about the only regionwith any serious gas demand, the marketer said, “and that’s helpingto prop up prices back East a little.” Indeed, the unusual Wahapremium to Katy weakened a bit but was still about a nickel higher.

A Houston source doesn’t see much steam left in this week’s bullmarket. Storage is bulging and it’s going to take some seriousweather to keep this market propped up, he said.

A trader who expressed a desire to wind up January businessbefore Christmas was hearing basis of minus 10 for El Paso-Permian.

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