It was mild, but a rally nonetheless. With a new spate of cold weather approaching the Midwest and Northeast, prices ranged from flat to up about 15 cents Tuesday. Not counting the Southwest basins, the West saw most of the flat to barely higher or lower numbers.

Strong performances by the petroleum-related futures contracts, including a gain of nearly 16 cents by December natural gas, appear likely to keep the rally going Wednesday. But the new bout of chilly conditions is expected to last only a couple of days, so cash prices may be faltering again by Thursday.

Most of the trading community worked Tuesday because of Nymex being active. However, sources reported a quieter market than usual because some, primarily utility staffers, were off for the Veterans Day holiday. “Quite a few utilities were out on holiday in New England,” a marketer said, but he didn’t know the situation elsewhere.

Another trader said Nicor was the only one of the big three Chicago-area LDCs on duty; Peoples and NIPSCO took off, he said, adding that “caught some of us by surprise because we didn’t know until during the trading process Monday that some wouldn’t be in Tuesday.”

Southern California border numbers were flat despite SoCalGas issuing an OFO (see Transportation Notes). And despite reports Monday that Opal curtailments due to high water content in Jonah Field production were decreasing, Kern River repeated Tuesday a bulletin board posting from last Thursday and Friday. The posting said Opal Plant operator Williams Field Services would again make cuts in the Intra-Day 1 cycle and that further cuts were possible in the Intra-Day 2 cycle.

A Gulf Coast marketer said the near-term weather forecasts have prices “looking firmer for a couple of days, then softer again.” He noted, however, that the market still hasn’t faced any situations in the young heating season in which frigid weather is both severe and widespread, so the jury is still out on this winter. Last week’s cold qualified on the widespread condition, the marketer said, but it certainly wasn’t severe.

One trader expects weakness for a while starting Wednesday in Florida Gas Transmission’s Zone 1, noting that maintenance outages from Thursday through Nov. 18 (see Daily GPI, Oct. 28) mean that virtually all Zone 1 receipts in Texas must be redelivered in the zone. The first major receipt points available for delivery to the Florida market area during the outage period will be near the Texas-Louisiana border.

The National Weather Service has a rather bearish forecast for most of next week. In the Nov. 16-20 period, it expects above normal temperatures from the Rockies eastward everywhere except Maine and peninsular Florida. Another big patch of above normal readings will encompass most of Washington, Oregon, Nevada and California, NWS said. It sees normal conditions in all other areas, with no below normal outlooks anywhere in the Lower 48 states.

While it probably was not a significant market factor Tuesday, interest may pick up after the National Hurricane Center sent an Air Force reconnaissance plane to investigate a persistent cluster of showers and thunderstorms in the eastern Caribbean Sea. “While there appears to be a mid-level circulation with this cluster, a surface low pressure center is not evident,” The Weather Channel commented. “It will require evidence of a surface circulation before any sort of tropical cyclone can even develop. Nonetheless, locally heavy rain has been falling across the Virgin Islands and Puerto Rico.”

Citing “colder weather last week (106 HDDs [heating degree days]…vs. 82 HDDs the previous week),” Lehman Brothers analyst Thomas Driscoll forecasts “a smaller [storage] injection of 20 Bcf” for the week ended Nov. 7. That compares to a 48 Bcf withdrawal last year and a five-year average injection of 6 Bcf, he said.

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