Getting genuine weather support and an additional boost from the previous day’s 30 cents-plus screen rise, prices rose again Tuesday at most points, but in considerably reduced amounts from Monday gains in most cases. As a result of the West’s modest moderating trend from last week’s cold, many of the smaller increases were recorded in that region and a few were flat to lower.

With sub-freezing highs forecast for Wednesday, the Northeast again led advancing markets, but no citygates rose as much as a dollar, although Iroquois Zone 2 came mighty close. Transco Zone 6-New York City only rose about 75 cents on average, but its $10 peak was the first four-digit quote recorded since the trade date of Jan. 30, also at Zone 6-NYC.

Outside the Northeast, gains ranged from about a nickel to 40 cents, with Northern Natural-demarc the only flat point in the East. Cash-screen convergence advanced again ever so slightly, with Henry Hub’s uptick of a little more than 20 cents leaving it only about 21 cents behind January futures.

Despite the slowdown in price upticks, continuing frigid weather and the screen’s further advance of 16.7 cents Tuesday (along with gains in the rest of Nymex’s energy complex due to new doubts about winter energy supplies) are expected to keep the overall bull market going Wednesday, although some softness may surface again in the West.

The “official” start of winter may still have been a week away, but physically winter had arrived with a vengeance. Freeze warnings continued to be in effect throughout most of the East and extended even into northern Florida, prompting Florida Gas Transmission to post an OFO-like notice (see Transportation Notes). However, FGT’s 25% tolerance level was considered very lenient by most pipeline standards.

A marketer reporting 16-degree lows in the Upper Midwest said he doesn’t see it warming up anytime soon. But he added that area forecasters were unsure whether it will stay cold or moderate, saying they expect to have a surer outlook in a couple of days.

The marketer had his suspicions about this week’s major price rises, despite the cold. “We’re well into heating season and still have 3.2 Tcf in storage,” he observed, so when will that begin pressuring prices lower? “I’ve never seen a winter when we didn’t get through the winter without enough gas,” he continued. There’s still a lot of speculation in the futures market as people keep trying to push prices up, he said. He said he was having to boost his company’s letter of credit Tuesday because of the December bidweek storage/futures debacle.

For the Dec. 20-24 workweek, the National Weather Service sees an even more bullish scenario for gas prices than this week’s. The only above normal temperatures it expects are in sparsely populated western Montana and eastern South Dakota. Meanwhile, NWS expects below normal readings nearly everywhere east of a line from western Wisconsin through central Louisiana. Only normal temps in the northern three-quarters of New England escaped the eastern forecast for below normal mercury levels. The agency also expects below normal temperatures in the Rockies and most of the Pacific Northwest except for western Washington; they’re also due along a narrow strip of the Mexican border from Southern California through West Texas, it said.

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