Flat or close-to-it pricing was almost universal in Thursday’s market, and for a change almost-imperceptible firmness prevailed instead of the mild declines that had dominated trading in the previous two days. The previous day’s screen uptick of 4.9 cents was the chief impetus for arresting the overall slide as forecasts continued to hint that the end of winter was nigh.
Flat to about a nickel higher numbers were recorded at most points; the tally of essentially unchanged prices may have set a market record. Losses ranged from 2-3 cents to about C10 cents. Obviously that meant virtually all movement was in single digits.
The Energy Information Administration was well below consensus expectations on either side of 130 Bcf in reporting a 116 Bcf pull from storage for the week ending Feb. 26. The surplus to year-ago levels was wiped out a few weeks ago, but the possibility of also eliminating the surplus to the five-year average proved elusive as inventories remained 21 Bcf above the five-year number. Nymex traders had a predictably bearish response in sending the April futures contract 18.2 cents lower to $4.575 (see related story).
It’s considered unlikely that most or all of the market will see significant dips in Friday’s trading. Several factors are working against further firmness: the subpar storage withdrawal and its accompanying futures slide; weather forecasts that have much of the southern U.S. starting to think of spring and those in northern markets rejoicing about escaping from near-constant freezing conditions; and the usual falloff of industrial load during a weekend.
Although the Northeast can expect another day or two of sub-freezing lows, its latest winter storm was moving out to sea Thursday, leaving the prospect of milder conditions ahead. Bottom-end temperatures in the 20s were also due Friday in the Midwest, but compared to previous weather in which even highs struggled to get above freezing, that was a relative blessing.
Much of the South, especially in the western half, can start looking forward to highs around 70 or so over the weekend. The West is staying relatively chilly, even in Southern California, through at least Friday, but it also is looking for milder conditions in the near term.
A Southwest utility buyer said local residents “can’t complain; it’s beautiful weather.” His region is definitely starting to see light at the end of the tunnel as far as the end of winter goes, he said, adding that “power prices are down too.”
The buyer said “hot, hot muggy summer weather” is about the only thing he could see at this that might revive spot gas prices. Another factor holding back an energy price rebound is “a real effort to conserve” as people continue to be affected by the weak economy, he said.
It’s pretty safe to say that major spot price softness is on the way Friday, he added.
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