With prior-day futures support having disappeared and mild-weather fundamentals coming more into play, nearly all points ranged from flat to down a little more than a dime Wednesday. A small gain by El Paso-Permian was a negligible exception to the overall trend.

Following Monday’s spikes across the energy futures complex that spurred sizeable gains Tuesday in the physical gas market, the Nymex mood has turned decidedly bearish. The gas screen fell 19 cents Wednesday, while the contracts for crude oil, heating oil and unleaded gasoline at New York Harbor all recorded major losses. Although still at a lofty level, crude fell more than 80 cents to settle below $36/bbl.

Spot gas traders were hard-pressed to find significant heating demand. Most of the coldest weather still around continues to reside in the Rockies and Upper Plains, and the relatively sparse population of those areas diminishes the market impact of their low temperatures. Much of the U.S. can expect rainy and occasionally violent weather Thursday, The Weather Channel said, but don’t look for any plunging thermometers.

“Other than the Nymex coming off big,” it was a pretty quiet day, a Northeast marketer said. Between the screen weakness and the generally mild weather, she thought it was a pretty safe bet that price drops would get even bigger Thursday. The marketer also sensed a shift in storage report expectations, with more traders starting to think that a withdrawal of less than 100 Bcf last week was not unlikely. If the Energy Information Administration does announce a sub-100 Bcf pull Thursday morning, that would only add to current market bearishness, she said.

With spreads of 55-60 cents or more between the Gulf Coast and Northeast citygates, a Northeast utility took advantage of its pipeline capacity rights by making mostly purchases in the production area and mostly sales in the market area.

Echoing other sources’ perceptions of a slack period in the market, a Gulf Coast marketer commented, “All is calm and quiet in the gas world, and aren’t you happy?” He admitted to normally liking more volatility in price movement than Wednesday’s small losses, but said he was enjoying the relative quiet for right now.

A Southeast utility buyer had only a sale to quote, but said she would rather have bought gas because that would mean the utility’s throughput was higher.

A utility buyer in Florida with no deals to report said, “It’s getting warmer here, but not enough” yet to require any new gas. The Sunshine State was anticipating highs in the low 80s Thursday.

©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.