A marketer had correctly predicted Monday (see Daily GPI, April 7) that the screen softness that day would outweigh any remaining midweek heating load and drive Tuesday’s cash prices lower. But while he looked for mostly modest declines, a large majority of them were in double digits.

Forecasts of dwindling heating load in the Midwest and South, along with negative guidance from prior-day futures, accounted for much of Tuesday’s cash softness at nearly all points. The omnipresence of a depressed economy continued to weigh on gas prices from its reduction of industrial demand.

Losses ranged from about a nickel to about 40 cents. As on Monday, Rockies quotes were taking the biggest hits, although Northeast citygates were starting to offer some competition in that area.

May gas futures fell another 17 cents amid continuing weakness in all of Nymex’s energy complex (see related story).

A start-of-week chill in the South is yielding quickly to more seasonal temperatures, but they’re not warm enough yet to yield any perceptible increase in air conditioning load for natural gas. And although freezing lows are still predicted for much of the Midwest Wednesday, the region will continue its retreat from colder weather as the week progresses.

Most of the Northeast is due to see little change from fairly moderate early April conditions, but in the areas that will record noticeable temperature movement, such as Buffalo, it will tend to be upward. Most of the West will remain cool to mild, with freezing lows in the Rockies and Western Canada largely counterbalanced by moderate daytime conditions.

The traditional storage injection season is just getting under way, but Southern Natural Gas says it is already approaching the two-thirds full level at its two facilities. As of last Thursday inventories were measured at 36.6 Bcf, or 61.1% of the total 60.0 Bcf of capacity, Southern said. That compares with 23.2 Bcf (38.7%) on April 3, 2008 and 34.2 Bcf (57.0%) on April 5, 2007, it added.

But Southern California Gas indicated that withdrawals haven’t entirely disappeared from the scene. After reporting an injection of 313 MMcf into its storage facilities Monday, the giant LDC said it projected net pulls from Tuesday through Friday.

There’s little doubt that the cash market is going to be soft again Wednesday, said a Gulf Coast trader, noting the forecasts of milder weather in several areas and the recurrence of declining futures. And nobody can forget that storage supplies are already plentiful with injection season just getting under way, she said.

Another bearish factor for Wednesday’s is that the low-demand period of the Good Friday holiday weekend is just over the horizon, the trader said. At least there are no significant pipeline problems, she added.

A Northeast utility buyer said he has been procuring nearly all of his company’s gas in the Gulf Coast, mainly on Tennessee’s 500 Leg, for about the last six to seven months because the delivered prices have been cheaper than Canadian supplies. It used to be the other way around, he said. He was “not sure” why the change occurred, but thought it had something to do with the strengthening of the Canadian dollar and declining Canadian exports to the U.S.

The buyer said he was looking forward very much to gaining access to gas from the Rockies this summer after the Rockies Express-East expansion goes into operation.

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