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Despite continued above-normal temperatures across much of theU.S., natural gas futures rumbled higher yesterday as local tradersbid up prices in an attempt to set off buy stops positioned abovethe market. However, by Monday afternoon it was apparent they wereonly partially successful, and after notching a $2.255 high theFebruary contract eased lower to close at $2.216, a 4.3-centadvance for the session. Estimated volume was low with 48,189contracts changing hands.

Much like the rest of the majors, Phillips Petroleum is back ontrack in terms of strong financial results with $221 million in netincome in the third quarter, up from $46 million for the sameperiod last year. But CEO Jim Mulva said the sale of its midstreamGPM business, and possible “joint venturing” of its chemicals,refining and marketing operations are still on. The GPM sale isexpected to take place before the end of the year.

Colder weather in northern market areas didn’t do much to raisecash prices, but it kept demand high enough to provide some pricesupport. Most eastern points were flat to slightly higher. In theWest, Rockies pipes emulated markets to the East with generallyflat performances, but California points fell by about a nickel ormore after PG&E announced it was lifting its two-daylow-linepack OFO.

The U.S. portion of TriState Pipeline got some much-needed goodnews last week when FERC issued a preliminary determination on thenon-environmental aspects of the project after resolving a stickyjurisdictional issue. But whether it will be enough to kick-startthe troubled project, which is lagging far behind the competingVector Pipeline, seemed doubtful.

The troubled TriState Pipeline got some much-needed good newsyesterday when FERC issued a preliminary determination on thenon-environmental aspects of the project.

Much like two Fridays earlier, the usual drop in gas demand thataccompanies business slowdowns over a weekend failed to have anegative effect on prices last Friday. Although it later fell morethan a nickel, an initially higher screen helped cash achieve gainsranging up to about a dime at nearly all points. Only San JuanBasin, the Southern California border and PG&E citygateregistered losses, and those were small at 3 cents or less.

Traders resurrected a phrase they hadn’t been using very muchlately: “following the screen.” Like a rising tide that lifts allboats, the Henry Hub futures contract for September turned in astrong performance Wednesday and spurred moderate firmness in cashnumbers. In the absence of substantial change in marketfundamentals, there was little besides the Nymex pit for cashguidance, a marketer said.

Speculation around the much anticipated storage report continuedto run rampant yesterday on trading floors across the natural gasindustry and that coupled with steady fund buying was enough tolift the futures market higher for the third day in a row. TheSeptember contract raced off to a fast start, but was unable toretest the $2.72 high set last Thursday. After notching a $2.66high trade around 10:30 EST the prompt month was left to chopsideways before eventually settling up 4.4 cents at $2.642.

Much of the U.S. bore some resemblance to a lit oven Thursday,and the Nymex screen was soaring like a space shuttle takeoff fromCape Canaveral. The two events combined to give strong support toeastern cash prices, which rose between a nickel and a dime atalmost every point. Gas demand was especially intense at theNortheast and Chicago citygates; both were up about a dime. TranscoZone 6-NYC deliveries topped all points with a high of $2.70.