LONDON (Commodity Online): Gas prices climbed slightly higher on the day as the weather outlook finally showed some incremental coldness at least in the near term. Both the prompt contract and calendar 2012 went up by three cents to $3.25/MMBtu and $3.47, respectively.
Calendar 2013 only added a penny and finished $4.12. The weather forecast on the day for the 11-15 day period showed some incrementally colder weather for the eastern half of the country, while the 6-10 day period remains overall warmer than normal.
We have previously written that for prices to receive support we need to see extreme winter weather for a sustained period of time.
A 10% colder-than-normal winter could only land the 2012 end-of-March storage level at that of 2011. The market did not rally for the 2011 end-of-March storage level.
Cash prices mostly edged higher with the exception of a few trading hubs. Henry hub fell by one cent to $3.12. SoCal Border increased by five cents to $3.56. Transco-Z6 came off two cents to $3.45.
