Traders were hard-pressed to come up with any substantive explanation for why cash prices staged modest rallies at most points Wednesday. There was no prior-day screen strength at which to point, and other than a warming trend in the South (destined to be brief) and colder temperatures in Western Canada and the northwestern quadrant of the U.S., the weather outlook failed to provide any rationale for higher quotes.

Nevertheless, other than a few scattered small declines, prices ranged from flat to a little more than a dime higher. Gains tended to be largest in the Midcontinent, Southwest basins and Rockies/Pacific Northwest.

“There’s no special reason that I could see” for the swing market to be slightly firmer, commented a marketer. It certainly wasn’t from a return of any significant heating load to his trading area of the Northeast, he said. However, he noted that despite the screen having fallen 3.3 cents on Tuesday, the fact that May futures had closed near its high for the day and then continued to firm in late-afternoon Access activity may have given a small boost to Wednesday morning’s cash business.

The Wednesday firmness is highly unlikely to be repeated Thursday after futures took an expiration-day dive off the high board. The May contract largely took its negative cue from plunges by Nymex’s petroleum product offerings in dropping 37.2 cents to $6.748. Crude oil for June delivery plunged a cool $2.59 to $51.61/bbl after morning reports revealed major builds in inventory during the previous week, helping to alleviate concerns about global supply.

Thursday’s swing trading will be for the Friday-Saturday flow period marking the end of April. The May aftermarket will get launched Friday with deals being made for Sunday-Monday flows.

Air conditioners should be revving a bit higher Thursday in the South as a warming trend continues, one source pointed out. Highs will be getting into the 80s over much of the region by Friday, but a cold front is expected to snuff out the warm-up Saturday.

Over in the West, Rockies gains tended to be a bit stronger than those in the Gulf Coast and Northeast despite Questar’s Clay Basin storage facility being shut down through Saturday (see Daily GPI, April 27), which might have been expected to be a price depressant by denying some supplies an injection option. However, some weather demand will be building as a cold high-pressure area slips out of Canada and brings snowy conditions to northern and central sections of the Rockies by Thursday night, according to The Weather Channel.

Otherwise, outside the South and upper West, the weather remains mostly bearish for gas prices. And anticipation of another increase in the year-on-year and five-year average storage surpluses when the EIA report comes out Thursday morning should have added to negative pressure on prices, a source noted.

“Nothing’s changed with the storage picture and mostly mild weather,” said a Midwest marketer, but he welcomed the Nymex dive anyway. It’s still cooler than normal in his region, but there was nothing to justify Wednesday’s small rebounds, he said. Turning to bidweek business, he reported doing all of his May purchases at last-day settlement basis of plus 25 cents at the Consumers Energy citygate and plus 26 cents for MichCon deliveries. He noted that some people do their basis deals using the average of the last three days in prompt-month futures, so naturally their May prices are going to be higher than those using last-day-only basis. “Our strategy was to wait and give prices a chance to drop,” he said.

“That was a nasty screen fall,” commented a Northeast trader. A “tricky expiration like that” complicates establishing bidweek prices, he went on. He thought a lot of May gas had already been committed before futures began its swan dive, so it will be “a crap shoot” on where indexes will shake out. The trader reported last-day settlement basis in the range of plus 50-57 cents for Texas Eastern M-3, Transco Zone 6-NYC and Tennessee Zone 6.

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