Coming off of Wednesday’s significant declines in natural gas futures, the cash market on Thursday not only recorded steep declines at a majority of points for the second consecutive day, but it also recorded widespread double-digit drops for the second consecutive day.

Lead by the 18.4-cent plummet in June natural gas futures on Wednesday, cash averages from Transco Zone 6 NY to the Southern California Border Average — and everywhere in between — declined mostly between 15 and 20 cents with some locations shaving off even more.

“Not seeing a whole lot of activity right now. Everyone is really thinking about bidweek, but there’s not a whole lot going on,” said a Midcontinent marketer. “Prices have been easing over the last two days and I think we’ve got the futures market to thank for that. There’s no reason for the screen to have gotten as high as it did, and I think traders finally came to their senses, which explains the last three days of futures declines. Natural gas could stick its head in the sand for a while, but it couldn’t ignore forever the fact that crude prices are spiraling lower and that stock prices are currently in a nosedive over global economic fears.”

On Thursday June crude dropped $1.86 to expire at $68.01/bbl and the Dow Jones industrial average fell 376 points, or 3.6%.

The marketer noted that while cash prices have been dropping, Midcontinent points exhibited some “strange behavior” on Thursday. “While Midcontinent averages were down for Friday delivery, they were a lot lower earlier in the day,” he said. “We saw some increases as the day wore on, which I can’t really explain.”

Commenting on the start of the decline, Barclays Capital analyst Biliana Pehlivanova said moderating temperatures likely had a lot to do with dropping market values. “An easing of the cold spell and forecasts for warmer-than-normal temperatures across the central and eastern parts of the country next week contributed to the shift in sentiment and pressured cash prices lower,” said Pehlivanova. “Cash markets suffered losses across the board.”

Cash point average could end up coming off a third consecutive session if traders follow the screen. In a topsy-turvy day for natural gas futures, the June contract ended up closing at $4.105, down 5.2 cents from Wednesday’s regular session close (see related story).

The market on Thursday morning digested what turned out to be some neutral supply news after the Energy Information Administration reported that 76 Bcf was injected for the week ending May 14. The number was smaller than historical comparisons for the week but widely expected by the industry.

Heading into the report, analysts at Tudor, Pickering, Holt & Co. Securities Inc. were expecting a build in the 70s Bcf, thanks to “much colder-than-normal shoulder period weather (cold mid-May is similar to being rock-scissor-paper champ…it does not mean much),” the analyst team wrote in a morning note. “Still nice to see [an] injection below 100 Bcf during the shoulder period.”

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