The cash market turned in a mixed performance Tuesday in which few points strayed more than a dime up or down. A cold front due to move through the Midwest Wednesday restored some heating load that helped support small gains at several Midcontinent points, but otherwise the overall continuing weakness of weather fundamentals again pressured a majority of the market lower.
Dropping April futures also remained a negative influence on cash quotes. Nymex traders followed up Monday's 17.1-cent drop with a further decline of 2 cents Tuesday, although the contract spent part of the day in positive territory before retreating again.
Essentially flat pricing was common at points in nearly all geographic market areas. Losses ran as high as a little more than 30 cents at Dracut in New England, but that was the only point to fall more than about 15 cents. Northeast citygates tended to take the biggest hits.
On the other side of the price coin, gains were small in ranging from a couple of pennies to nearly a dime, and were most prevalent in the Midcontinent and Rockies.
Mild conditions will continue to dominate the weather map in most locations Wednesday. However, the Midwest is due for a cooldown, with Chicago's low around 44 degrees Tuesday expected to shrink to just above freezing. The Northeast also will start to feel a bit more chill again at its northern extremities, but most of the region will not experience a cold front's arrival until around Thursday. Moderate spring-like conditions will again prevail in the South and most of the West.
Traders again commented about how quiet the current market has gotten. A Texas-based marketer said his company is just "trying to keep everything flowing and make everybody happy," which he noted aren't always compatible goals. And even in quiet times, there is always a challenge in coping with various transportation capacity constraints; right now the main problem on Tennessee going forward is at the Carthage Hub in East Texas, he said.
A colder trend in the Midwest is keeping prices modestly supported in the Midcontinent for now, the marketer continued. The lower temperatures should spread into the Northeast later this week and possibly allow small rallies to occur at regional citygates and/or Gulf Coast points around Wednesday or Thursday, he said.
Meanwhile, West Coast weather "is so damn nice" that it's hard to find either heating or cooling load, said a trader based there. He noted that a PG&E high-inventory OFO for Tuesday, not posted until Monday afternoon (see Transportation Notes), was the latest sign that western supplies are more than adequate.
It's spring break vacation time with their families for a lot of traders, which is contributing to quiet times in the market, he added. "We're trying to get some transportation contracts completed," but necessary contacts are out on vacation in some instances, he said.
The National Weather Service (NWS) has another mostly mild outlook in its six- to 10-day forecast for the March 19-23 workweek. It predicts above-normal temperatures throughout nearly all of the West, Plains, Midcontinent, Lower Midwest and South. The only exceptions in that vast area, where normal conditions are expected, are most of the coastal edge of California; the northwest half of Washington state; South Texas; and peninsular Florida. Maine in New England is the only state where NWS predicts below-normal temperatures. Normal readings are forecast for the rest of the Northeast, coastal sections of the Mid-Atlantic and the Upper Midwest.
PowerLytix expects a total storage withdrawal of 121 Bcf to be reported for the week ending March 9. The Spokane, WA-based consulting firm looks for pulls of 94, 22 and 5 Bcf from the East, Producing and West regions, respectively.
©Copyright 2007 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.