As sources had expected, the cash market succumbed to weak weather fundamentals and dwindling energy futures support Tuesday by staging a major retreat. Virtually all points saw double-digit declines ranging from about 15 cents to half a dollar or so

With moderate springtime conditions having settled into all regions (not counting a few still-chilly mountainous areas in the West) in the past week, many traders felt it was only a matter of time until the market bowed to the pressure of the early-spring transition period when both heating load and cooling load are in short supply.

The comfort factor of already-high storage levels with the injection season just beginning just added to the pressure, one said. Only artificial influences such as the Goldman Sachs speculation late last week about a possible “super-spike” period for energy prices staved off the inevitable softening, he added.

Nothing on the foreseeable horizon — barring a massive disruption in global markets — suggests any substantive rally before the potential of a hot summer arrives.

In its latest six-to-10-day outlook, the National Weather Service predicted above normal temperatures for most of the East during the April 11-15 workweek. It expects such readings almost everywhere east of a line running south-southeastward from eastern Montana into Southeast Texas. The excepted area in the East where normal temperatures are likely is a strip along the Gulf Coast that includes all of Florida and the southern ends of Georgia, Alabama, Mississippi and Louisiana. NWS also forecasted above normal mercury levels in Central and Southern California along with California-bordering slices of Nevada and Arizona. The only area where the federal agency expects below normal temperatures is in Washington state and the northern edge of Oregon.

It looks like the market is settling down for an extended quiet period of gradually falling prices, a Midcontinent/Midwest marketer said. A small drop by the natural gas screen combined with bigger declines among the petroleum products (crude down nearly a dollar) should extend Tuesday’s cash softness into Wednesday, he went on. However, he doesn’t look for any price crashes because “it’s a good time to inject storage with 30-cent spreads to May from now.”

The market should stay weak for a pretty good while, the marketer added, because he doesn’t think there will be enough storage demand to make up for the lack of weather-related load. Cash should lag behind Nymex for the rest of the month, he said.

On a tangential note, the marketer commented that Northern Border has about 650 MMcf/d of space open, but it’s not giving any discounts in an effort to sell that capacity. Even so, traders are sitting back because that much available transport capacity doesn’t seem to be having any market impact, he said.

The LDC Forum in Boston Wednesday through Friday will keep the Northeast market very quiet for the rest of the week by removing a substantial portion of liquidity, said a source in the region. He expects “listless trading” and tight ranges, adding that the Northeast market would have been pretty quiet anyway now that the 2004-05 winter seems to be banished for good. The source said he observed some “pretty good buying” anyway Tuesday by LDCs and power generators, likely for storage refills. Gulf Coast-citygate basis stayed strong, he noted.

Analysts see the possibility of a small storage injection being announced for the week ending April 1 — the date traditionally regarded as the start of injection season. Citigroup’s Kyle Cooper said his final estimation is for inventory levels to be essentially unchanged from a week earlier, but added that they could range from up 5 Bcf to down 5 Bcf. However, Thomas Driscoll of Lehman Brothers thinks the withdrawal season has one last gasp left in it, calling for a pull of 10 Bcf.

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