It was off to the races Tuesday for spot prices, as a soaring screen paced the cash market to large gains. Except for the Rockies and Southern California border, nearly all other points managed to surpass the November futures advance of a little more than 21 cents. The run-ups were attributed largely to a noted meteorologist’s forecast that the coming winter will rank among the top third of the coldest over the last 106 years (see related story).

A bit of near-term weather also played a role in Tuesday’s bullishness, as a cold front penetrated as far south as Houston and was expected to maintain its chill for at least a couple of more days. However, a Chicago citygate trader dismissed cold in the Midwest as “no big deal” for this time of year, and said a warming trend should be under way by the end of the week.

“The Salomon Smith Barney forecast spurred cash higher, which in turn spurred the screen,” a marketer said. “A lot of people have been short in the day market and are having to ante up” now that colder weather has forced their hands, he added. “They were looking ahead at the weather more than anything else.”

A Gulf Coast source said SSB’s winter forecast should keep prices supported for a while longer. “You have to be long-term bullish if you look at the forward supply picture. We’re in no danger of not having enough gas, but definitely demand is outstripping supply” if current trends continue. He also perceived one large trading operation as trying to move the market higher Tuesday, “and they definitely accomplished that.” However, he said, the Northeast may look softer relative to the overall market over the next few weeks now that LNG shipments can resume to Distrigas in the Boston area (see related story).

A western marketer couldn’t deny the reality of higher prices, but didn’t think they were justified with general fundamentals still weak. “I have yet to meet someone that can satisfactorily answer the question: Why? I heard that SSB said it was going to be a cold winter, but it is always cold in the winter. This is all fine and dandy, but the market usually doesn’t react like this. Something is making it volatile or something. It has got to come off because the [cold] weather has to be actualized, and that is a ways off still. Maybe it is going to be cold, but prices are not going to be nearly like last year.” The market is looking for storage injection reports in the 40-50 Bcf range for both last week and this week.

There was some speculation that part of the price strength may have derived from nuclear plants quietly shutting down for security reasons in the wake of the Sept. 11 terrorist attacks. One event feeding such rumors is the Nuclear Regulatory Commission’s denial of access to its “Plant Status Report” website, which previously had posted operator-supplied updates on the current operational status of the more than 100 U.S. nuclear generating units.

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