Since weather-based demand remained light to nonexistent for the weekend in most areas, price increases in a large majority of the cash market Friday could only be attributed to the previous day’s 17.3-cent futures rise following a moderately below-expectations storage injection report.
However, one source suggested that bargain-hunting may have been in play for some buyers hedging their bets against the possibility of a very hot summer and/or very active hurricane season impacting Gulf of Mexico production.
Most of the market was flat to a little more than 15 cents higher, with gains tending to be in single digits in most cases. The few losses were minuscule, being limited to a couple of pennies or so.
All of the minority softness occurred at western points, which was hardly surprising considering that both of California’s biggest distributors declared high-linepack OFOs for Saturday (see Transportation Notes).
Cash quotes will continue to be supported by futures Monday after Nymex’s prompt-month gas contract tacked on a further uptick of 12.9 cents (see related story).
Producers may finally be heeding the advice of analysts that the continuing advance of drilling rig activity in recent months is hindering a return of higher prices. For the first time in 17 weeks the Baker Hughes Rotary Rig Count reported a decline of rigs seeking gas in the U.S., saying its count was down 17 to 956 for the week ending April 23. Two rigs quit the search in the Gulf of Mexico, Baker Hughes said, while the onshore tally fell by 15.
Although some locations in the Rockies and Alberta could expect overnight lows not far above freezing, the overall weekend forecast for most of the U.S. and Canada ranged from merely chilly to moderately warm. Those kind of conditions were expected to have few if any furnaces or air conditioners being turned on.
A Midwest utility source said her area would be on the cool side during the weekend, but not nearly cold enough to result in significant heating load.
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