Despite little appreciable increase in significant weather-based load, a 3-cent drop by June futures a day earlier and the weekend impact on lowering industrial demand, cash prices were able to realize modest gains at most points Friday.
Most of the losses ranging from 2-3 cents to about 15 cents occurred in the Midcontinent and West. Minor price movement also dominated the quotes that were flat to about 15 cents higher.
Monday’s cash market will have ample screen support after the prompt-month contract rebounded by 17.3 cents Friday. Futures trading activity was enlivened a bit by an outage lasting a little more than an hour of the Globex electronic platform (see related story).
Weekend Midwest temperatures would be below normal in areas where rain and thunderstorms were predicted, The Weather Channel said, but near average in drier areas farther north. Overnight lows in the 40s could be expected to spur some furnace use, but no substantive heating load was likely. However, such demand could get a boost from cold fronts arriving in the region during the early and latter parts of this week, according to TWC.
Whereas the Midwest would see relatively little change from already cool conditions, a cooling trend was due in the Northeast. However, any additions to heating load would be marginal as only upper New England was forecast to get any colder than about the mid 40s.
Most of the South would continue to top out in the mid 80s Saturday, but there may have been a moderate increase of cooling load at the region’s eastern end as that represented warmer highs than before at such locations as Atlanta and Charlotte, NC, which were peaking around 80. Highs are starting to reach the 90s in Florida.
Freezing lows were expected to continue in some sections of the West, but they were in relatively sparsely populated areas where the gas market impact was limited. And parts of the desert Southwest that had been hitting the low to mid 90s late last week would start cooling off into the mid 80s during the weekend, according to Madison, WI-based Weather Central.
Kern River said Friday linepack had returned to normal throughout its system.
A Northeast marketer thought at least part of Friday’s cash firmness could be attributed to late quotes “following the Nymex higher.” Although temperatures would be cooling during the weekend in the Northeast, “it won’t get really cold,” so physical market-area demand was still a bit weak, he said, adding that he couldn’t detect any price impact of any significance from the Transco Imbalance OFO that began Friday and the Action Alert OFO that Tennessee planned to implement Sunday (see Transportation Notes).
A Texas-based marketer said liquidity tends to be pretty light for the first of each month as traders do not only daily spot deals but make sure all their bidweek ducks are in a row. “After we got past that” Friday, he suggested, there’s more flexibility in focusing on the daily market and some traders may have been finding more value Friday than during the more hectic activity Thursday.
He agreed with the Northeast trader that early Nymex strength lifted some late cash prices but said volumes affected would have been fairly small since most physical business has been completed by the time futures traders have a chance to make any impact.
A marketer said the weather was trying to get more spring-like in her Upper Midwest area but hadn’t quite gotten there yet. A cool but “decent” weekend was in the local forecast, so she found Friday’s overall price firmness to be something of a mystery.
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