Wednesday’s screen spike obviously trumped somewhat bland weather fundamentals in pushing cash prices strongly higher Thursday. However, a combination of reversals in Nymex’s energy futures complex Thursday and the typical drop in weekend industrial load is a sure bet to spur market softness Friday, several sources agreed.

Gains ranging from a little more than 20 cents to about 40 cents were distributed fairly evenly across all market areas, except that the larger ones tended to cluster at western points.

Actually, though weather wasn’t considered a huge factor in the Thursday upticks, that didn’t mean it isn’t gradually growing more supportive of gas prices. Highs in the 80s and even 90s are stretching from the desert Southwest throughout the South and Mid-Atlantic, and even through the Midcontinent into the Lower Midwest. And forecasts indicate that even hotter temperatures will be showing up in those regions by early next week.

However, a marketer noted that even with California numbers getting lower in relation to Permian/Waha levels, suggesting that Texas intrastate and Midcontinent/Midwest demand was pulling more gas eastward and northward from the basin, she hadn’t seen any real pick-up in calls from power generators seeking supply. She joined the consensus looking for lower weekend prices.

The Energy Information Administration had no surprises for storage report handicappers. Its estimation of a net 85 Bcf injection last week fit handily within the range of prior expectations. The East region, with 53 Bcf, contributed the lion’s share of the build.

The Chicago market was well bid Thursday, which was related to many people liking to get cash deals done early on storage report day, a Houston-based marketer said. The citygate was falling back in late deals amid a wide trading range of more than half a dollar, he said. It appears that indexed June deals for the Midwest will be at index flat to slightly higher, while Midcontinent discounts to index will be smaller than usual, the marketer said.

Almost everything in the cash market has been Nymex-driven lately, so definitely expect lower prices Friday, a Calgary-based producer said. His major current gripe is that price liquidity “is still pretty lousy, as far as I can tell.” He reported that in contrast to the mild to warm weather south of the border, it was cold and rainy Thursday around Calgary, “but that’s better than cold and snowy.” He said he was a bit surprised to see the Chicago market for June starting to look weaker.

The producer and a marketer both commented on how the market pace is pretty slow for now, with traders spending relatively leisurely afternoons on paperwork such as preparing RFPs [requests for proposals]. But activity should pick up substantially as bidweek gets under way next week, the producer said.

©Copyright 2004 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.