Primarily due to some serious cooling load developing across the southern half of the U.S. (especially in the more heavily populated South) and abetted by a smidgen of chilly weather remaining in the forecast for the upper Northeast, the cash market was able to shrug off the previous day's 2.9-cent decline by May futures and rise at a majority of points Wednesday.
Nobody was going to be particularly impressed by the resurgence of most cash numbers, however, because only two locations saw gains as high as about a dime, while the rest were flat to up a little less than a dime. Losses ranging from a couple of pennies to about a dime were concentrated in the Midcontinent and West.
It may not be enough to sustain Wednesday's overall firmness, but the cash market Thursday will have a modicum of prior-day futures support after the May contract rebounded by 2.1 cents (see related story).
There was no doubt that quite a few air conditioners are getting cranked up now with predictions of highs ranging from the mid to upper 70s through the mid 80s in nearly all of the South through the Midcontinent and as high as the mid 90s in some parts of the desert Southwest such as Phoenix.
And heating demand hasn't totally disappeared yet, although it has been making itself increasingly scarce over the last week or so. The Weather Channel (TWC) predicted that "showers and high terrain snow or rain/snow mixed will impact portions of New England and upstate New York." However, the price effect was limited to some extent by TWC saying most of the cold would occur early in the day before the region's gas day gets under way at 10 a.m. EDT. And conditions will be getting considerably more pleasant going into the weekend.
The Midwest also will be retaining some chill Thursday, but quite a bit less than in the Northeast.
An expected high around 80 Thursday in Denver tells you all you need to know about softness prevailing in most of the West. And unusual recent heat levels in inland California will be receding greatly. The West also had at least one issue with excess supply as PG&E issued a high-inventory OFO (see Transportation Notes).
A Gulf Coast trader said there is already fairly substantial air conditioning use going in Texas, adding that the only reason she hasn't turned on the air conditioner yet at her house is that a visiting grandmother "is cold-natured and wouldn't like it."
Power generation demand for air conditioning was the main reason the trader could see for Wednesday's mostly minor firmness. However, the upper half of the Northeast is getting ready for what may be "the last hurrah" of cold weather in the U.S. this season, she added.
The trader said she had done a little bidweek trading, nearly all at index flat. She reported getting "a lot of calls" for May gas already, but had to wait to line up her estimates before closing the deals. She thinks the May baseload market will be well bid, at least in the Gulf Coast, because some significant cooling load will be coming on-line in the South during the month.
In its six- to 10-day forecast posted Tuesday afternoon for the April 27-May 1 workweek, the National Weather Service (NWS) said it expects above-normal temperatures everywhere except nearly all of Florida south and east of a line running roughly southwestward from southern New Hampshire through central Illinois before turning more to the south-southwest through the southeastern corner of Oklahoma into eastern, central and southwestern Texas (much of South Texas was also left out of the above-normal prediction). NWS looks for below-normal readings in a large area along the West Coast from northern Oregon to the Mexico border and stretching eastward to include nearly all of the desert Southwest, Rockies, Upper Plains, northern Midcontinent and most of the Upper Midwest. Anomalies in the overall forecast pattern call for above normal along the northern edge of Washington state and below normal in the northern half of Maine.
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