Although The Weather Channel’s website headline said “Spring has sprung” Thursday morning, it will not officially be true until Saturday. But the continuation of spring-like weather in most of the U.S. was able to ensure that cash market softness would endure. Of course, the previous day’s second consecutive fall of 4.4 cents by April futures was another bearish influence.
A couple of flat locations in the Rockies were exceptions to overall losses ranging from 2-3 cents to about 15 cents.
The Energy Information Administration’s (EIA) report of an 11 Bcf storage withdrawal for the week ending March 12 was well below consensus estimates that were about 10 Bcf higher and spurred Nymex traders to drive prompt-month futures another 21.8 cents lower (see related story).
Analyst opinion was growing that the mild weather of the current week could very well result in the first net injection of 2010 being reported in EIA’s March 23 report.
Chillier weather that had invaded much of the South during the past two days would be on its way out again Friday, leaving mild highs around 70 or so in many locations. Cool but mostly seasonal condition were due to remain in most of the rest of the U.S., although snow and/or sub-freezing lows were still in the forecast for the Rockies and much of Western Canada.
The California market was hit by high-linepack OFOs from both SoCalGas and PG&E (see Transportation Notes). The SoCal citygate saw a loss of less than a dime, but Malin, the PG&E citygate and the Southern California border recorded declines from the low to mid teens.
El Paso also indicated a current excess of supply, saying its probability of declaring a Strained Operating Condition due to high linepack had been shifted to high.
“Big surprise,” commented a Texas-based marketer wryly on the fact that prices fell due to warmer weather. The weather forecasts and large futures drop make it pretty much of a certainty that the cash market will move lower again Friday, he said. He was unaware of any significant transportation problems currently.
It’s too early for bidweek business to get going to any major extent, the marketer said.
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