By Brendan Conway

The bitter, nasty winter in the Northeast isnt over. A fresh storm Tuesday and jitters over more cold to come sent the market for natural gas on another upswing .

The most actively traded gas futures contract jumped 6.1% to settle at $5.51 per million British thermal units, a three-week high and a 31% surge year-to-date.

From the Wall Street Journals Christian Berthelsen :

Gas inventory levels are already at a 10-year low after a severe winter in many parts of the country, and traders expect more cold weather will further reduce supplies. Analysts are expecting another large withdrawal from inventories in weekly U.S. government data to be released Thursday.

Its no surprise that forecasts for below- to well-below-normal temperatures across the East next week and severely depleted storage levels are providing a boost to the market, Addison Armstrong. an analyst with brokerage Tradition Energy. said in a note.

Maxim Groups Ronald J. Barone argued in a morning note that the path of least resistance actually looks to be lower, both in the short run and the very long run (3-4 years):

Given the outlook for moderating temperatures over the next few weeks, we expect further slippage in the March contract. Despite the volatility in prices this winter, prices have been more stable further out in the curve. We continue to believe gas prices above $5 are not sustainable over the next 3-4 years.

Late in Tuesdays session, United States Natural Gas Fund  ( UNG ) has jumped by 5.4%.

Leveraged ETFs VelocityShares 3X Long Natural Gas ETN  (UGAZ ) and VelocityShares 3X Inverse Natural Gas ETN  (DGAZ ) are zipping 13% apiece, while ProShares Ultra DJ-UBS Natural Gas ETF  ( BOIL ) is ahead by 6.4%. while  ProShares UltraShort DJ-UBS Natural Gas ETF  ( KOLD ) have moved close to 7%.

Correction 2/19:  Natural-gas futures Tuesday settled at a high since Jan. 29, not a four-year high as indicated in the headline and second paragraph of the original version of this post. 

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