After nearly a week and a half of run-ups at all or nearly all points in the face of relatively little weather-based demand, the cash market finally bowed to the reality of its lack of fundamental support Wednesday by softening at a majority of points. The declines occurred despite substantive prior-day screen support in the form of Tuesday's 14.7-cent gain by June futures. That likely limited most drops to about a dime or less.
Several points, mostly in the Gulf Coast and West, avoided the overall price downturn by being flat to about 15 cents higher. Losses ranged from 2-3 cents to about 45 cents.
Thursday's cash market will have negative futures guidance after the prompt-month contract fell 11.6 cents Wednesday (see related story). It likely also will be bearish due to expectations of a storage report estimating an inventory drop in the mid to high 90s Bcf for the week ending May 8, which would exceed historic comparisons.
The Florida citygate recorded Wednesday's biggest drop as Florida Gas Transmission ended an Overage Alert that had been in effect for the previous 11 days.
Northwest-South of Green River, which had been the only point left out of Tuesday's overall upticks, saw one of Wednesday's biggest gains as Northwest ended a Declared Deficiency Period at Vernal Compressor Station (see Transportation Notes).
Cold fronts are forecast for the Northeast and the Midwest's Ohio Valley Thursday, but in mid-May they will only be restoring a moderate touch of chill to those areas and having almost no substantive impact on heating load.
Although the South appeared to be getting near summertime heat levels Wednesday, predictions of widespread thunderstorm activity in the region Thursday will be squelching to some extent any newfound increases in gas-fired generation load to handle air conditioning use. And after a midweek surge of higher temperatures, highs in the Midcontinent will be receding to the 70s Thursday, according to Madison, WI-based Weather Central.
The West's forecast continues to call for heat in the Southwest with chilly conditions to the north. Some snow is possible in the upper mountain elevations, The Weather Channel said.
A Texas-based marketer said he was a little more surprised that the cash market's string of gains finally ended Wednesday than by how long it ran despite generally bearish weather conditions. He thinks there is a good chance of another move up in the next few days but said it probably will not occur Thursday. Cash quotes were "following the Nymex" and tended to drop for the most part as trading proceeded Wednesday, he said.
The market has been "kind of quiet" lately, the marketer said, which gave him a much-needed chance to catch up on paperwork Wednesday.
Intelligence Press Inc. All rights reserved. The preceding news report
may not be republished or redistributed, in whole or in part, in any
form, without prior written consent of Intelligence Press, Inc.