Gas for Monday delivery fell about 8 cents nationwide in Friday trading as an overall shortage of demand combined with the need to make up ground traversed by the double-digit decline in the May futures on Thursday. Losses were greatest at eastern points as temperature forecasts called for seasonal readings for most of next week. At the close of futures trading May had lost 2.3 cents to $2.126 and June had given up 1.1 cents to $2.259. May crude oil added 24 cents to $102.02/bbl.

Monday prices at Northeast points suffered the greatest declines as traders cited a lack of demand rather than any concerted effort to sell the market. “Prices are just a function of demand. There are probably a few traders that bought some gas that had to sell some, but I don’t think anyone went into the month intentionally long without some thought they would be burning it when the weather warms up,” said an eastern marketer.

“The first day of the month is a Sunday, so loads will be down for that.” The marketer also ventured the possibility that April spot prices may continue to fall below index. “It all depends on what happens with Nymex.

“Historically, though, spot prices will stay pretty close. First of the month basis differentials to Henry Hub also stay close. This March was unusual,” he said.

The losses at Northeast points came despite forecasts of blustery, spring weather. “A dip in the jet stream will continue to send bouts of chilly air and spotty snow into the Northeast through next week,” said AccuWeather.com meteorologist Alex Sosnowski.

“After a narrow zone of snow affects areas from upstate New York to southern New England [last Friday night], a second swath of snow will aim for areas farther north Sunday night into early Monday. The overall pattern will continue to funnel near-average temperatures into the Northeast through [this] week, after an incredibly warm month as a whole.”

Deliveries to Algonquin Citygates tumbled about 20 cents, but Iroquois Waddington and Tennessee Zone 6 200 L shed closer to 16 cents.

In the Upper Midwest traders grappled with heavy storage inventories and price declines that in many cases followed the futures tailspin Thursday following the plump Energy Information Administration inventory report.

“We didn’t get our gas out in time for the first of April, but we won’t have to pay penalties until the end of the month,” a Midwest utility buyer said. “We plan to get rid of more gas in April, but we’ll still be over the ratchet level and have to pay some extra charges. You just have to roll with it. That’s the way it is.”

Quotes on Northern Natural Gas Ventura shed about four cents, and next-day deliveries to Chicago Citygates and Alliance dropped close to a dime.

At Gulf points price declines mirrored those of the market as a whole. Gas into ANR SE and Columbia Gulf Mainline skidded about 7 cents, and quotes on Texas Eastern E LA shed about 8 cents. Parcels into the Henry Hub avoided much of the softness and settled down just a couple of pennies.

The weak expiration of the April contract and Thursday’s price pummeling has futures traders looking another 30 cents lower.

“I think if we get below $2 we’ll see some more selling come in and take the market another 30 cents lower next week or the following week,” said a New York floor trader. “The market looks like a slow grind lower, and I expect a lower open on Monday. We’ve got plenty of gas, and there is no weather. $1.80 to $1.85 is my estimated support zone.”

Analysts see the ongoing dynamic of continued increases in the storage surplus as not having fully played out. “This extremely heavy pricing environment is still reflecting the dynamic of an expansion in the huge supply overhang that has not fully run its course,” said Jim Ritterbusch of Ritterbusch and Associates. “The fact that the supply surplus against five-year averages has increased to 900 Bcf, or 58%, [shows] an additional stretch would appear likely during the next couple of weeks. So despite the fact that the current record supply of some 2.44 Tcf has been discounted into the market, we feel that the strong likelihood of additional expansion in the supply surplus will maintain downside price risk, especially as physical pricing comes under further pressures.”

Forecasters are still calling for above-normal temperatures, but their occurrence is somewhat more limited to the central U.S. MDA Information Systems in its six- to 10-day outlook shows normal temperatures east of a line from Alabama to Maine and below-normal temperatures from the Great Basin to the Pacific Coast. A pod of much-above-normal temperatures is centered over Minnesota and extends as far south as Texas.

“Changes were mixed but mostly to the cooler side [Friday] with a focus over the eastern third of the nation. While the net pattern is still more warm than cold, it includes an increase in cool variability compared to the past several weeks or more. This comes as changes take shape over the North Pacific to include a decline in the EPO [Eastern Pacific Oscillation] into the negative range. Models continue to wildly vary run to run in the details, but the general themes of the West Coast being coolest, Midcontinent warmest and East somewhere in between hold true in most cases.”

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