Dollar-plus gains at all Northeast citygates and on Dominion in Appalachia were mixed into overall cash spikes Tuesday. Upticks of half a dollar or greater were consistent throughout the East and in the Waha/Permian Basin markets. The rest of the West tended to lag behind but still saw fairly strong advances of about 20-30 cents or so.

It was an entirely weather-driven burst of bullishness that accelerated the price increases of the day before, a Midcontinent marketer said. A natural gas screen that foundered within a couple of cents on either side of flat all morning certainly offered precious little guidance to cash traders, he said, although the crude oil and heating oil futures contracts rebounded strongly amid anticipation that Secretary of State Colin Powell’s speech to the U.N. Wednesday may more clearly delineate a timetable for war with Iraq.

Forecasts of arctic blasts closely resembling those of late January but not quite as cold in the eastern half of the U.S. and Canada provided a solid foundation for Tuesday’s gains, according to one source. The Midwest was already under a winter storm siege with highs not expected to get above the 20s across the Great Lakes states. Meanwhile, the Northeast and South were just beginning to feel the effects of cold fronts, with considerably more frigid conditions due later this week.

Despite the tremendous boosts in average prices, numbers were falling far and fast towards the end of the morning, a Northeast trader said. “I tried for a Dracut [Maritimes & Northeast delivery point into Tennessee in Massachusetts] purchase at $8.20 but couldn’t do it. I sure was glad later because the market was falling apart near the end,” he said. He reported seeing Texas Eastern M-3 at $8.15 early and then $7.00-05 later on. “I think some people were aiming for $10-plus, but then the market ran out of buyers.”

That left a lot of people long on supply at the end of the morning and probably trying to bank gas on the pipes, the trader continued. But there was some risk involved there, since restrictions on scheduling due-shipper imbalance makeup gas by some Northeast pipes mean they might not get banked gas back for possibly as long as a week or two, he said. Such traders could end up selling at a substantial loss when finally allowed to schedule due-shipper gas again, he said.

Despite the late retreats creating highly volatile ranges, the Northeast trader said he thinks “we may see $10-plus citygates like in late January later this week because the weather is going to get worse and also spread into the South again.”

A Midcontinent/Midwest marketer said late prices also tumbled in his region. “Midcontinent numbers fell by 30 cents in the last hour,” he said. Traders have completely dismissed ANR’s Sunday night rupture in Illinois (see Daily GPI, Feb. 4 ) as having any market impact other than Monday’s one-day spike on ANR Southwest. “I don’t think we’re that crazy [referring for potential return of $10-plus pricing in Northeast],” the marketer said with a laugh, “but you never know about those guys [Northeast traders]. After all, the Northeast is a foreign market for us.”

A Florida utility staffer observed that even though weather in the state may be quite mild, buyers there can’t escape the impact of competition for Gulf Coast supplies from soaring markets elsewhere. At least her utility’s load was so small that no new purchases were needed Tuesday, “which is a blessing when prices are spiking like this.”

The West’s failure to scale the heights being seen in the East was no mystery, a western source said. “We just don’t have the weather demand that they do back East.”

However, unlike the late softening trends seen in the East, a marketer reported rising quotes at Malin and some other western points. She attributed the late upticks to rising demand for Alberta gas heading east to more lucrative markets in Eastern Canada and the U.S. Midwest and Northeast. “That got a lot of people to buy late at Malin,” she said. The marketer felt that although prices likely would keep moving higher in the East Wednesday, the bullishness there was unlikely to be strong enough to keep supporting western prices beyond Tuesday.

A Southwest trader said Permian Basin and Waha numbers greatly outpaced the rest of the West because of their ability to access intrastate Texas and Midcontinent/Midwest markets. “Permian gas was mostly going east and then north from Waha,” he said. Northern Natural throughput from the lower MIDs continues to be hampered by a continuing outage of the pipe’s Mitchell to Spraberry line outage (see Daily GPI, Feb. 3), he said, noting that some plants in the area are limited in the tailgate volumes that can be sent north.

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