Prices were in a steep slide across the board Monday, with heating load continuing to recede and the cash market no longer having prior-trading-day screen support. All points yielded more price ground Monday than they had gained on the previous Friday.
Losses were pretty evenly distributed across geographic market areas in ranging from a little more than 20 cents to around 60 cents.
Sources had pointed to Thursday’s spike of 37.5 cents in April futures as the primary driver of weekend price gains Friday, saying cold weather was insufficient to have generated such a solid advance. In turn, with warmer weather trends under way and the screen having retreated 3.8 cents Friday, it was natural to expect the cash softness on Monday.
Following a chilly previous week in most areas, the nascent spring season is starting to live up better to its reputation for milder weather. Despite a cold front moving into the western reaches of the South Monday night and Tuesday, most of the region is enjoying a warming trend, according to the Weather Channel (TWC). Milder conditions have also occupied the Midwest, and while the Northeast was still a bit cool, temperatures will be close to average Tuesday and should run temperatures above average by midweek, TWC said.
The West Coast was bracing for what is expected to be a potent storm system that will bring some heavy mountain snowfall that could reach one foot or more, TWC said. But for most of the West, moderate conditions suggestive of mid-spring are in the forecast.
It was starting to seem a little more springlike in the Calgary area with Monday afternoon temperatures in the 40s, said a producer based there. The Chicago citygate “showed a lot of strength late,” he said, primarily because it was extremely weak early. He believed the recovery was at least partially related to more demand surfacing from utilities into the south-central U.S. seeking backhaul supplies from the Midwest.
The April bidweek was launched with a tremendous weakening of basis “all over,” the producer continued. That was kind of unusual, he noted, since basis tends to strengthen on days when the screen is as weak as it was Monday. He reported Chicago fixed-price deals being done in the mid $6.40s, and that citygate basis had plunged to minus 62-63 cents Monday after being estimated at minus 35 cents last week. The May-October Chicago strip was being offered at minus 50-45 cents, he said.
Saying it looked like a fairly routine bidweek shaping up, a Texas-based marketer reported these April numbers transacted Monday: El Paso-Permian, high $5.60s; NGPL-Midcontinent, low to mid $5.70s; Northern Natural-demarc, low to mid $6.00s; Southern California border into PG&E (Topock), mid to high $5.70s; Transwestern-Permian, low to mid $5.50s; and Waha, mid $5.70s.
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