The Northeast, where unseasonable cold was expected to linger for another day or two, was the rare market seeing rising prices as April aftermarket trading got under way Monday. Otherwise, except for some flat to mildly softer numbers in California and the Rockies, losses tended to range from about a nickel to 30 cents. The overall market was weighed down by general mild weather and continued screen weakness.

Lower May gas futures were in sharp contrast to hefty gains in the crude oil and heating oil contracts, where prices were buoyed by ongoing concerns about the progress of the war with Iraq and the civil strife in Nigeria that has greatly hampered that nation’s exports. Crude rose more than a dollar to barely surpass the $31/bbl level.

Traders in all regions reported a major downward trend in late swing prices. Supplies seemed “very long” to a Southwest marketer who said buyers were hard to find. It appears that prices will be fairly weak through the first week of April, she added.

To a producer, the South Texas market looked like “a fire sale was going on” in late deals. Quotes for Tennessee Zone 0 fell into the $4.40s as deadline neared, and sources quoted Transco Station 30 as low as $4.20.

Contrary to the late weakness reported in other regions, a Northeast utility buyer said there was “a little bump upward” in late citygates. But he expects the Northeast to join the overall softness as early as Tuesday or Wednesday. Temperatures are due to remain unseasonably cold through Tuesday, but a warming trend is expected to begin around midweek, the buyer said.

Gulf Coast prices were relatively strong early, “but then the bottom fell out,” commented a Houston-based marketer. But he sees one near-term bullish sign: temperatures in the Gulf Coast are fairly comfortable now, but the region from Texas eastward can expect air conditioning load to start rising from midweek onward.

A Calgary-based source noted that the screen-following intra-Alberta market not only was influenced by weak futures, but also by NOVA’s announcement that imbalance tolerances had been shifted to 0/-4 Monday (see Transportation Notes). That means the pipeline has excess linepack on its system and doesn’t mind if shippers go short on nominated volumes and reduce that linepack, the source said.

According to a Gulf Coast producer, two main factors are keeping prices from getting any higher for now: one, warmer weather, “and two, an impending storage crisis that has not yet hit. We have a long way to go to get our storage facilities filled by the time winter rolls around again.

“Many traders think that if we don’t buy significantly now [for storage], we could pay a lot more later. Of course, we could also have a very mild summer and watch prices drop though the floor. But even if it is not a really hot summer, some early warm weather will make prices volatile. Plus you will notice there is no new production, supply is staying flat and demand is ever increasing.” Liquefied natural gas (LNG) is not cheap, the producer observed, “so if prices stay around 5-6 bucks, foreign gas will become a bigger player” than it already is.

Very little April business remained to be completed Monday, but a Midcontinent trader reported “not much change from Friday” in pricing.

Analyst Thomas Driscoll of Lehman Brothers said last week’s warm weather leads him to estimate that an injection of 30 Bcf for the week ended March 28 will be reported Thursday by EIA. This will compare to a 61 Bcf withdrawal a year ago (“the weather was much colder”) and a five-year average withdrawal of 43 Bcf. Driscoll also estimated that next week’s storage report will show an injection of 20 Bcf compared to a year-ago withdrawal of 9 Bcf and a five-year average injection of 13 Bcf.

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