With Canada and much of the northern U.S. experiencing deep-freeze low temperatures and a more-of-the-same outlook for Wednesday, the market continued to eke out small, single-digit gains at most points Tuesday.

The major change in price trends was that although New England deliveries continued to soar by 60-90 cents or so to as much as $9.50, other Northeast citygates (Texas Eastern M-3 and Transco Zone 6’s two pools) retreated by as much as 15 cents.

Algonquin citygates continued to handily top the price charts as the pipeline advised shippers that overtakes exceeding a 2% tolerance would start being charged a penalty of $15/Dth Wednesday (see Transportation Notes).

“Yes, it’s very cold here and will be for a while longer,” said a Northeast utility buyer. But he wasn’t sure if cash numbers had much upward momentum left, noting that in addition to the screen’s drop of nearly 15 cents Tuesday and the M-3/Zone 6 declines, his purchases at the non-New England citygates trended downward by 30-45 cents over the course of the morning.

For a western trader, the market watchword for now nearly everywhere is “cold.” However, the West contained the greatest number of Tuesday’s flat to slightly lower points, he noted, which was probably related to the few remaining pockets of relative warmth being concentrated to the west and south of the Rocky Mountains.

Despite being located in a region expected to see heavy snowfall Wednesday, a central Plains utility buyer had no deals to report Tuesday. “We’re catching up on storage withdrawals,” he explained, but acknowledged that the utility is “on the verge of having to get back” into the spot market.

A Calgary-based producer said the area got “a little snow” Tuesday, but would be back above freezing in a couple of days or so. She also felt that market bullishness might have peaked Tuesday, noting that a modest intra-Alberta rise into the mid C$6.40s for next-day gas was turning into mid C$6.30s numbers in late afternoon trading for Thursday. The February market looks hard to pinpoint, she added, reporting intra-Alberta deals for next month being done at index from plus C5 cents to minus C3 cents.

Analyst Kyle Cooper of Salomon Smith Barney said his final estimation for this week’s storage report is a pull of 99-109 Bcf. “Any draw of less than 100 Bcf will be considered quite bearish, while a draw between 100 and 110 Bcf would be considered relatively neutral,” Cooper continued. “Looking through the balance of the season, by our calculations, if withdrawals average 120% of the five-year average, stocks would fall to 931 Bcf by the end of March. From various reports and other industry talk, it seems the market is pricing in an end of season level much lower than this. While clearly the weather for the next couple of weeks will probably lead to draws significantly exceeding 120% of the five-year average, it may prove difficult to maintain an average that high for the next 13 weeks. Once again, it seems this market has already discounted very bullish information and is possibly set up for a disappointment if weekly withdrawals are not quite [that] large.”

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