Although it was eventually far outpaced by a soaring screen, the cash market did make some effort to keep up Monday. Nearly all points rose between 2-3 cents and about 15 cents, with gains on either side of a dime being most prevalent. Sources in several areas, however, reported lower numbers in late deals. A Northeast buyer said Transco Zone 6-NYC started in the mid $3.20s but was about a dime lower at the end.

Much like Thursday of last week, futures and cash numbers seemed to have a serious disconnection from weak fundamental realities, several traders said. Thus they were hesitant to hazard a guess on where the market will go now. The screen didn’t take very long to leave Henry Hub cash behind and eventually wound up at a premium of about 12 cents, one trader said, noting that until yesterday physical gas at the Hub had maintained a comfortable margin over futures during morning trading for several weeks. He thought the reversal might be the factor that spurs both cash and futures to begin a period of retrenchment, citing Monday’s late cash retreats as supporting evidence of such a scenario.

Others weren’t so sure, though. A marketer, who considered it basically the strength in oil futures (heating oil registered another large advance, and while crude oil rose less than half a dollar, settling above $24/bbl) that is driving the gas contract, summed up what seemed to be the majority opinion: “I don’t know whether gas can sustain these levels. Normally I wouldn’t think so, but then I didn’t believe it would get to here in the first place.”

The newest advances left all the Northeast citygates, along with the Appalachian pipes, the Florida and PG&E citygates and Niagara averaging about $3 or greater.

Although Sumas still averaged almost a nickel above domestic prices, Sumas was a rare point in showing a net loss for the day. Buyers for the more expensive Sumas gas were disappearing quickly as Pacific Northwest weather-related demand dropped, a marketer said.

The PG&E citygate saw one of Monday’s biggest gains of nearly 15 cents; the utility expects Redwood Path capacity from Malin to be only 87% of normal through next Monday due to a fire-caused unplanned outage of its Gerber Compressor Station.

Explaining his absence of quotes Monday, an East Coast utility buyer said, “Our oil dispatch is currently more economic than using gas. But the way things are going, resid prices at the burnertip might catch up with gas by the end of the week.”

A Northeast utility trader reported “chilly but very sunny conditions” in his region, which he said combined for an overall moderate feel. He offered his analysis of the high-wire act of prices: “We’re not in a fundamental market right now; it’s almost all financial plays. Sometimes we wonder if gas trading has lost all touch with reality. But the falloff in production from fewer rigs drilling has played a large part in the run-up. Also, there is a general belief that the economy is stronger than people thought it was.” So although price influences may appear weak on the surface, he concluded, there may be deeper currents at play in the market waters.

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