Fueled by positive expiration-day price action last Friday andprodded by continued anticipation of higher prices this summer,natural gas futures shuffled higher yesterday as bulls gave a warmbuying welcome to the new spot contract April. With that boost theApril contract closed up 6.9 cents at $2.686 while the summer stripwas up 5.3 cents at $2.721.

However, the futures market was not acting alone Monday. Tradersalso cited higher cash prices for both February and March as asupportive market feature. NGI’s Henry Hub price for today is$2.60, up 9 cents from yesterday. But while some traders were ableto point to reasons for the price advance, other remained baffledby the market’s ability to claw higher in the face of much-abovenormal temperatures across much of the country. And according tothe National Weather Service the heat wave will continue for theeastern half of the country at least through Mar. 9. California anda portion of the Southwest U.S. are the only areas expected to seebelow-normal readings while the Pacific Northwest, southern Rockiesand north Texas will see normal temps.

However, for Tim Evans of New York-based Pegasus EconometricGroup it is not the weather but rather the storage report that willdeliver the crushing blow to the market this week. “Storage datafor last week finally has a chance to match the weather inpresenting a bearish fundamental outlook, as the projected heatingdegree day accumulations were the lowest since November. Netwithdrawals of 50 Bcf or so, will look bearish when placedalongside the 128 Bcf tally from last year.”

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