Cash market averages Wednesday for Thursday delivery were mixed but mostly quiet, but operational issues raised prices at points in California. Futures markets drew to a mixed close as bulls continued to cling to technical support levels and bears awaited storage data expected to continue a trend of sub-par withdrawals.

At the close of futures trading April had eased 1.5 cents to $2.284 and May had added 0.8 cent to $2.416. April crude oil tumbled $1.26 to $105.43/bbl.

Buyers reported that compressor difficulties on Florida Gas Transmission had largely been rectified.

“Station 6 is the only point on FGT with problems and that is taking out about 2/3 of Zone 1, but other than that you can flow anything,” a buyer said. “I don’t know whether people are more nervous and buying more Zone 3 or what.”

“I don’t know that we had a winter this year. It seemed as though fall just floated right through into a little bit of spring.”

The buyer said they were seeing a little bit of AC load, since temperatures were in the 80s. “That isn’t all that warm for Florida, but the load isn’t anything that is going to pressure the market. I think it will be a very hot summer, and I think it will start a lot sooner, but we’ll have to wait and see.”

Next-day prices on Florida Gas Zone 3 added a couple of penniies, but other Gulf points fell into the loss column. Henry Hub dropped a couple of cents, as did Transco Zone 3. Columbia Gulf Mainline shed 2 cents and ANR SE was down a couple of pennies as well.

Rockies quotes were flat to lower. At Opal, next-day gas dropped just shy of a nickel and on Northwest Pipeline Wyoming Thursday gas was a couple of pennies lower. CIG Mainline and the Cheyenne Hub traded flat.

Low flow rates prompted an OFO on PG&E and “that ran prices up a little bit,” a trader said. The OFO was puzzling, for “our loads didn’t tick up all that much, and maybe the pipeline made a miscalculation or somebody has some high requirements for electrical generation.”

California points were generally firm. PG&E Citygate added almost a nickel and SoCal Border and SoCal Citygate gained a couple of pennies apiece.

Futures stumbled to a mixed close on stout volume, but traders were looking ahead to Thursday’s inventory report.

“We traded up to $2.30 and change, but we are still sitting about where we started and we’ll see what the number is tomorrow,” said a New York floor trader. In his view “we might bottom out here in the next day or two, but if it’s a bearish number we’ll probably get into the teens. If we can get some of these shorts to cover, we could get up to $2.42.”

If estimates are correct, the weekly Energy Information Administration storage figure is likely to continue the trend of sub-par withdrawals. Last year 60 Bcf was withdrawn and the five year average pull is 79 Bcf. A Reuters poll of 19 analysts ranged from a 45 Bcf decline to 73 Bcf with an average 57 Bcf. Bentek Energy utilizing its North American flow model calculated a 57 Bcf withdrawal as well, and IAF Advisors in Houston expects a draw of 61 Bcf.

Tuesday’s and Wednesday’s price action in the April contract to as low as $2.204 [Tuesday] gave market technicians a chance to test the concept of “support.” Prior to Tuesday, $2.231, the low posted by the March contract, had been viewed as the consensus technical support level. Just how resilient that support was got tested Tuesday. Prices did breach supposed support, but April managed a rather pedestrian gain of just over 3 cents to settle at $2.299.

Brian LaRose, market technician at United-ICAP, believes that “support should never just prevent a market from falling, it should repel the price action higher. That was precisely the case on Tuesday. So, double bottom in place? To even suggest that is the case, $2.415 must first be exceeded.”

LaRose isn’t quite ready to fully give up on market support in the $2.20-2.23 range, but he says if $2.415 can be attained, “we can entertain the possibility of a larger degree seasonal advance into May.”

The weather picture hasn’t changed much. Commodity Weather Group in its recent forecasts still calls for above- to much-above-normal temperatures for everywhere east of Nevada, but differences are starting to emerge among weather models in the more distant periods.

“While the models continue superb agreement on the six-10 day period with widespread strong above-normal anomalies, we continue to see model-to-model and run-to-run variability for the 11-15 day range,” said Matt Rogers, president of the firm. “Collectively, the models agree to peel away the super-strong warming of the one-10 day, but individually, they differ sharply on how fast and how strong to do it. Given the strength of the current situation, we again chose to take a cautious approach to bringing temperatures lower. This keeps the East in the much-above category for the period average and even still maintains a strong above period anomaly in the western Midwest and northern Plains. If one area were to cool faster days 13-15, it looks like it would be the Northeast,” he said in a morning forecast for clients.

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