In a general sense Monday’s market resembled the Tuesday-Thursday trading period of last week in which many points were either flat or not much removed up or down from unchanged. The key difference Monday was somewhat greater volatility; instead of being limited to about a nickel’s movement in either direction, quotes ranged from about a dime lower to about 15 cents higher.

Once again reality is different from what the National Weather Service (NWS) predicted. In its forecast for the March 22-26 workweek (see Daily GPI, March 17), NWS saw below normal temperatures only in New England, with nearly all of the rest of the U.S. expected to record above normal readings. The federal agency couldn’t be faulted for its call on much of the West, where thermometers do continue to rise above normal levels for late March. And sub-freezing lows in New England bear out that part of the forecast.

But lows around 32 degrees F. or less also are being felt from the Northeast and Mid-Atlantic through the Midwest to the Upper Plains, and even residents of the South were remarking about how crisp and cool conditions were Monday, with a hard frost hitting some sections.

However, gradual moderation in both directions — warmer in the East and cooler in the West — is anticipated as the week progresses, although the Northeast will stay chilly and possibly get some more snow through about midweek as a weak Canadian cold front slips in behind a polar air mass heading eastward out into the Atlantic, according to The Weather Channel (TWC).

Energy futures Monday likely pointed to softness in the cash market. Natural gas at Nymex fell only 3.6 cents, but the April crude oil contract (which expired Monday) plunged just shy of a dollar to $37.11/bbl as traders digested hints that the Organization of Petroleum Exporting Countries may delay production cuts that had been slated to go into effect April 1. On the other hand, new terrorism fears sparked by Israel’s assassination Monday morning of the founder of the militant Palestinian group Hamas could turn oil market psychology around again.

Discontinuance of the high-linepack OFOs issued for Saturday by SoCalGas and PG&E allowed western markets, which had seen most of Friday’s larger declines, to record sizeable rallies of up to about a dime. But the general regional rebound probably won’t continue much longer. Although a few cities may still see new date-specific record highs like the ones recorded in several instances last week, a gradual cooling off will lead to more seasonal weather later this week, TWC said.

“We’re going to have enough hot weather to last us for nine months, so the cool this morning felt great,” said a Houston-based marketer of the unusually low temperatures and low humidity that greeted early risers in the Lone Star State.

A western trader reported Waha numbers mostly on the rise in later deals, going from the high $4.80s early to the low $5.00s. However, although the weather in Texas was cooler than she expected, the market still seemed slow and kind of weak even with some western rebounds. She guessed that some traders must still be out on spring break vacations with their kids, helping to explain why activity was not picking up much. “I hope they remember to get back” in time for bidweek, the trader said.

A Florida utility buyer said her city’s afternoon high was only 64 degrees, adding that it “sure surprised me” how unusually cool it had gotten since Friday. Regarding the approaching bidweek, the buyer said people were starting to ask “what are you hearing?” for April, but nothing solid is happening yet.

A marketer said it looks like April index deals will be running slightly negative in the Midcontinent and Midwest, but closer to flat in the Gulf Coast. He reported trading a small amount of Transco Station 65 at index flat Monday, and said he was hearing Henry Hub at index flat to plus 0.75 cent and Tennessee 500 Leg at index flat to minus 0.5 cent.

Saying he expects the Energy Information Administration to report a 60 Bcf storage withdrawal for the week ended March 19, Lehman Brothers analyst Thomas Driscoll noted that last week’s weather was mild in the West but cold in most of the eastern half of the U.S. “Overall, last week’s weather was in line with the 30-year norm and 69% colder than last year,” Driscol said. A 60 Bcf pull would compared with a 6 Bcf injection a year earlier.

Citigroup’s Kyle Cooper said his final estimation of the EIA report looks for a draw of 49-59 Bcf, a smaller prediction than his original one because of “temperatures and other data pointed toward a slightly smaller draw than initial indications.”

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