As anticipated, the prior-day drop of 31.2 cents in natural gas futures, combined with previously weak fundamental weather and storage influences, induced cash market plunges of around half a dollar or more at nearly all points Wednesday.

Three points fell by less than 50 cents, but the rest of the market recorded losses ranging from a little more than 50 cents to about 80 cents.

The lack of heating or cooling load in the intrastate Texas market, except for some chilly temperatures in the upper Panhandle, was evidenced by four points heavily influenced by that market — Katy, the Houston Ship Channel, El Paso-Permian and Waha — experiencing some of the day’s largest declines of 70-80 cents or so.

The Southern California border had managed to climb higher by sizeable amounts Monday and Tuesday despite SoCalGas having a high-linepack OFO (normally a major price-killer) in effect Monday through Wednesday. The giant LDC extended the OFO through at least Thursday, and this time the border price acted accordingly in diving more than 60 cents Wednesday.

The screen managed to reverse Tuesday’s drop with a gain of 15.9 cents Wednesday that was largely regarded as being in concert with rebounds in Nymex’s oil-related product offerings after the Energy Department reported the ninth straight weekly drop in distillates inventories (which include home heating oil, the chief competing fuel of natural gas for the winter heating market).

Can the screen continue to point out the direction for next-day cash price movement? No, according to a fuel buyer for a Northeast utility. He expects the recent pattern of cash numbers “following the day-before screen” to get broken Thursday. Even with gas futures up nearly 16 cents Wednesday, he believes cash traders will pay more heed to the bearish weather and storage factors for a change. He acknowledged that the market has ignored fundamental influences at times in the past for no particular reason, but said they’re becoming more important again now that energy futures in general are coming back down from historically stratospheric heights.

The buyer said the market has gotten “pretty quiet” now that his utility is no longer able to sell gas due to a regulatory condition. It didn’t buy any swing gas for Thursday because system linepack is plentiful and first-of-month baseload supply is meeting any incremental needs during the current period of relatively moderate weather in his region. “All of our storage accounts are virtually full,” he said, so that’s no longer an option for buying gas even with prices falling by large amounts like they did Wednesday.

Another source agreed that the market should stay soft until some colder weather comes along. The East and West Coasts are expected to stay around seasonal or above normal temperatures next week, but cold in the central U.S. may be able to rally prices, he said.

Except for a winter storm due Thursday in the Pacific Northwest, the overall weather picture is forecast to remain generally moderate until the weekend, when a cooldown is likely in the Midwest, according to The Weather Channel.

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