It didn’t make sense to a number of sources, but there it was: prices going up Tuesday everywhere except at Northeast citygates even as generally weak fundamentals continued to get even weaker. Not counting the Northeast, quotes rose by a nickel to about 20 cents across the board.

However, after swallowing their surprise, several traders agreed that the rebound was unlikely to continue today. A marketer reported seeing Chicago citygates drop late more than a dime from early highs in the mid $2.30s, ending up in the low $2.20s, barely above Monday’s average. And except for a small late pop at Florida-related points, other traders also said the morning’s trend was downward.

A Midcontinent/Midwest source said an overnight uptick in Access futures numbers apparently provided a firm starting base for cash, “and the screen was up a few cents at first in the regular session.” He also thought people might have looked ahead to predictions of a return of colder weather in the eastern third of the U.S. early next week, although the National Weather Service was revising that outlook to normal to above normal temperatures everywhere except in much of the West in Tuesday’s latest six-to-10-day forecast.

There didn’t really seem to be that many buyers at Chicago, the source said, leading him to think “a lot of storage plays” must have been behind the citygate’s gain of about a dime. “Monday’s softness probably was largely due to storage pulls, but it wasn’t happening Tuesday,” he said.

A Texas-based trader saw a psychological factor in most points managing to rebound even with warmer than seasonal temperatures reigning throughout most of the nation except in Florida. The market mentality has been readjusted radically in the last couple of years, he said. He recalled an old bumper sticker seen frequently around the oilpatch states during the mid-1980s price crash that read something like: “Please, God, please send us another boom and this time we promise not to mess it up.” Well, the natural gas market got a hyperboom during 2000, the trader continued, “and now we’ve got a different psychology after prices went to around $10 a year ago. The boundaries have moved on market perceptions; why, a lot of [newer] people in the market now have never seen prices below $2.” That kind of thinking can sometimes allow prices to move against the grain of fundamental factors, he concluded.

Following Monday’s sharp spike, Florida citygates soared even higher, according to a marketer quoting them from around $4.30 to the high $4.50s. Florida Gas Transmission tightened the negative imbalance tolerance further in an OFO-like notice (see Transportation Notes) as market-area temperatures continued to be near freezing. A buyer in the state said that based on the incremental costs of Florida Gas Transmission, she had calculated that people with firm capacity on the pipe could have made “a cool buck-fifty” in profit Monday when citygates soared to the $4 area while production-area prices fell a nickel to a dime. Although temperatures in northern Florida were expected to remain around freezing through this morning, the buyer said, the cold weather was due to start breaking later today.

The Pacific Northwest’s Sumas and Stanfield points registered some of Tuesday’s larger gains of around 20 cents despite any appreciable weather-related load. A marketer said he assumed much of the gas bought at the higher prices must have been destined for Northwest Pipeline’s Jackson Prairie storage facility. The increases occurred despite PG&E Gas Transmission-Northwest, citing Due to high-linepack conditions on its system, holding an auction Tuesday for up to 100,000 Dth of its inventory gas.

Calling it a “pretty precipitous fall,” one trader said the basis market softened considerably Tuesday for the February through October period. Chicago basis fell to plus 0.25-0.50 cents for the April-October strip, he said, and was plus 2 cents for Februrary. The February basis had been plus 4 cents last Thursday and was as high as plus 9.5 cents at the end of December, he said.

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