Physical gas prices for weekend and Monday delivery overall fell 12 cents Friday as cash market traders played catch-up with Thursday’s 14-cent futures losses.

Declines were widespread, and no points made it to the positive side of the trading ledger. Futures prices staged a rebound on updated weather outlooks and made up most of Thursday’s losses. At the close, June had risen 12.3 cents to $4.055 and July was higher by 12.1 cents to $4.103. June crude oil gained 86 cents to $96.02/bbl.

Physical traders, however, will likely see a big lift when trading resumes Monday. “That’s the way it works; you get a big move up or down in futures [and] the cash nearly always follows the next day,” said a Rocky Mountain producer.

Although the producer is not optimistic for the short term, he believes the longer-term outlook is for higher demand and, presumably, higher prices. “The back of the curve really shouldn’t come down. We’ve got increasing demand from Mexico and billions of dollars in fertilizer plants coming on in 2015, and you can see all this demand building with the Panama Canal expansion coming on in 2015. It looks like the first LNG shipment from the Cheniere plant will be in 2016.”

Quotes for weekend and Monday gas at Rocky Mountain points fell sharply. At the Cheyenne Hub, gas dropped 12 cents to $3.72, and on CIG Mainline weekend and Monday packages were seen at $3.67, 14 cents lower. At Opal, deliveries fell 15 cents to $3.69, and on Northwest Pipeline Wyoming gas fell 13 cents to $3.67. Gas on El Paso San Juan was off 15 cents to $3.70.

Prices in the Midwest fell in spite of weather forecasts calling for temperatures as much as 15 degrees above normal in some metro locations. AccuWeather.com said the high Friday in Chicago would rise to 79 Saturday and 86 Monday. The normal high in the Windy City is 70. In Kansas City Friday’s 81 high was anticipated to rise to 87 Saturday and reach 85 Monday, well ahead of the 76 degree seasonal norm. In Saint Louis, the high Friday of 77 was forecast to jump to 85 Saturday before reaching 90 on Monday. The normal high in Saint Louis this time of year is 76.

On Alliance weekend and Monday gas was seen 15 cents lower at $3.92, and at the Chicago Citygates parcels were traded at $3.94, 15 cents lower. Deliveries to Northern Natural Gas Ventura dropped 15 cents to $3.82, and at Demarcation parcels came in at $3.83, 13 cents lower.

Other major hubs were also lower. Transco Zone 6 New York was seen at $3.96, 17 cents off Thursday’s pace, and at the Henry Hub prices fell 12 cents to $3.89. At NGPL Midcontinent Pool weekend and Monday gas dropped 12 cents to $3.78, and on El Paso Permian parcels were quoted at $3.74, down 12 cents.

A surprise move higher by futures caught several off guard. A floor trader hadn’t seen any news, but a meteorologist at Commodity Weather Group said updates to the American model during the trading session called for higher temperatures at East Coast locations next week.

The Rocky Mountain producer discounted the rise. “Texas, California and Florida are the largest gas-for-power states in the summer. It doesn’t matter what happens in New York, New Jersey or any of those states; 80 degrees back there isn’t going to mean a hill of beans.”

Traders saw the day’s futures’ advance as indicative of a directionless market. “Trading characteristics in this market remain somewhat similar to those in the petroleum as whipsaw type action remains the norm. [Thursday’s] large 14-cent price selloff was quickly followed by an equivalent sized rebound,” said Jim Ritterbusch of Ritterbusch and Associates. “Some of this strength appeared related to bullish spillover from the petroleum while a shift in some private weather forecasts to hotter patterns may have also provided some bullish impetus. Regardless, it is apparent that this market is having difficulty following through in either direction.

“Assuming no major change in weekend updates to the temperature views, we will maintain a bearish trading stance and would suggest holding any short July contracts established within the $4.05-4.10 zone. Stop protection is still being advised above the $4.15 area on a close-only basis. We will also continue to advise maintenance of winter-summer back spreads such as long January 2014-short July 2013. Finally, we will note that gas rigs lifted by four units per Baker Hughes [Friday]. But elevated production levels still look like a bearish consideration within this market.”

Technical traders see the bears needing further downside to solidify their case. “While Thursday’s decline engulfed two and a half days of upside, the bears were unable to break below $3.883,” said Brian LaRose of United ICAP. “So [the] best we can label the price action is constructive. Follow-through [was] needed Friday. Assuming the bears can push natgas below the $3.883 low, the A=C objectives from $4.444 will be our next downside targets.” His figures show 0.618 of the move targets $3.748, and a full retracement targets $3.534-3.483.

WSI Corp. in its morning six- to 10-day outlook said, “Temperatures are slightly warmer over the East and slightly cooler over the West when compared to [Thursday’s] forecast.”

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