No snowstorms are expected except for possibly in some mountainous areas of the West, but quite a few folks may be getting a reminder Tuesday that the winter season isn't all that long departed. The chillier forecasts, aided slightly by the return of industrial load from its weekend decline, resulted in flat to higher prices at a large majority of trading points Monday.
Generally, the market was flat to nearly 15 cents higher. A few scattered losses ranged from 2-3 cents to a little more than a dime.
The cash market will have some prior-day screen support again after May futures ended a six-session string of declines with a rebound of 6.7 cents (see related story).
One factor in Monday's price advance likely was near-term weather forecasts turning a bit more bullish over the weekend. Except for normal conditions in the Florida peninsula and in South and West Texas, the National Weather Service (NWS) outlook for the April 16-20 period calls for below-normal temperatures throughout the eastern two-thirds of the U.S. and from the Canadian border through southern Wyoming, Idaho and Oregon going westward from the Dakotas.
However, such widespread chill won't last long as the NWS predicts that in the April 18-24 period the below-normal readings will have receded to the northern tier of states, only occasionally dipping into states not abutting the Canadian border. Slightly above-normal temperatures will occupy nearly all of the southern half of the nation, NWS said.
Although The Weather Channel reported that record warmth for this time of year was spreading from the South into the Mid-Atlantic and parts of the Northeast Monday, it had a limited effect on Monday's upticks. Most of the East is expected to experience highs in the cool to merely mildly warm range Tuesday while lows should be chilly to cold.
The Florida citygate recorded the top gain as Florida Gas Transmission issued an Overage Alert Day (OAD) for Monday due to hot market-area weather (see Transportation Notes). But it's unlikely that the OAD will be continued as a cool front moves into the South and diminishes much of the air conditioning load that had been developing over the weekend. Texas and Florida will be about the region's only areas still expected to see temperatures top out in the 80s Tuesday.
Much of the Rockies and Upper Plains will see lows falling to not far above freezing, while subfreezing bottom-end temperatures will continue in much of central and Western Canada. Even parts of inland California, the Pacific Northwest and the desert Southwest can expect to experience lows in the 40s.
Citi Futures Perspective analyst Tim Evans noted something else that may have given a boost to both the cash and futures markets. U.S. nuclear plant outages currently are "running higher than a year ago and above the five-year average rate for this point in the year," he said. The likelihood of gas being bought to help make up for the temporary losses in power generation may have turned the market higher, "at least for now," he added.
IntercontinentalExchange (ICE) said Chicago citygate quotes were up less than a nickel on its online platform, but the amount traded there fell from 785,400 MMBtu Friday to 709,500 MMBtu Monday.
A Texas-based marketer said he wondered if Monday's new Japan earthquake might have boosted gas price psychology as well as in oil trading this time. Whether that's the case, there certainly is a limited renewal of heating load in the gas market, he said. Usually northern residents tend to shrug it off when lows don't get below the 40s, but maybe some of them have turned their furnaces back on, he suggested.
The marketer said he thinks cash numbers should continue moving higher in at least the Northeast Tuesday, but he was not so sure about other market areas.
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