This week’s erosion of prices (not counting isolated pockets of firmness, mostly in the West) slowed to a crawl Thursday as further declines were limited to about 30 cents or less, and quite a few points (again, mostly in the West) registered moderate gains of up to about a quarter.

But most traders regarded Thursday’s near-plateau as a mere breath-catching point on the way to much lower weekend numbers. They had ample evidence to back up such expectations.

First and foremost, there was the spectacular crash-dive of oil and gas futures Thursday. Not only did the natural gas screen settle half a dollar lower following a below-expectations EIA report, but crude oil fell nearly two dollars to end the day just a penny over $36/bbl as it appeared increasingly likely that U.N. action on an Iraq war resolution will be delayed until at least next week, if then. And as if to top the action in the other two products’ trading pits, Nymex’s heating oil contract for April plunged more than 6 cents/gallon, which is a huge move in that commodity.

Second, the last vestiges of winter weather in the upper Northeast will continue to fade over the weekend, although snowy conditions are likely to persist for a while longer in the Sierra and Cascades mountain range areas of the West. Otherwise, except for the possibility of wet snow in the Dakotas to begin next week, most market areas will be enjoying springtime weather for the next few days.

Third, any bullish hopes were undoubtedly dashed when EIA reported that only 117 Bcf got taken out of storage last week, a volume that fell short of the majority of prior expectations.

And, of course, there’s always the dropoff in demand, especially among industrial users, that typically accompanies a weekend market.

It’s unlikely to generate any rallies near-term, but a Midwest utility buyer said her company had begun storage refills this week, and she knew of quite a few end-users behind the system that also are injecting. The unexpectedly low storage withdrawal report should give an extra boost to an early start of injection season, she thought, as will further swing price declines below monthly indexes, which is a virtual certainty in Friday’s trading for the weekend. “All the snow has melted by now in our area,” the buyer said, and temperatures around 60 degrees are expected by Saturday.

Northeast prices kept falling after weak starts, with approaching warmer weather the obvious influence, a regional trader said. Tennessee Zone 6 and Dracut both started around $7.25 and steadily dropped another half-dollar, he said. The EIA report came out too late to affect much cash business but it did hasten near-deadline declines, he added.

Dracut and Tennessee Zone 6 have returned to trading under the Algonquin citygate and Texas Eastern M-3 after having seen unusual premiums to those points until this week, the trader continued. “Will they stay there? Is it seasonal or normal behavior? I think they will stay [lower] because I’m hearing Dracut at plus 50 cents basis for the summer, which is less than M-3.”

Sources continued to be puzzled about the West’s relative price strength in comparison to the overall market. A marketer reported hearing that production problems at Jonah Field behind the Opal (WY) Plant were getting worse instead of better, which would keep some gas off market. She also mentioned rumors of “one or two marketers trying to keep the PG&E citygate up for their own reasons, but I don’t know anything else about why it would be strong without an OFO.” These little market anomalies keep cropping up lately with no satisfactory explanations, she observed. However, with the Aeco market weakening like it is, she expects the trend will shift from Alberta gas going east toward Eastern Canada and the U.S. Midwest and Northeast to more of it heading south toward California. “That should tone back the [PG&E] gate some,” she concluded.

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