A day after recording double-digit increases across the board, the cash market moved in the opposite direction Tuesday with declines measured in double digits at nearly all points. Heating load continued to recede in northern market areas with very little new air conditioning load surfacing to offset the demand loss, and Monday’s screen drop of 4.2 cents was followed by further softness at Nymex Tuesday.

Tuesday’s cash slide ranged from just under a dime to nearly a quarter. Western points tended to see most of the smaller losses.

Based on weather returning to or approaching mid-spring norms again in most market areas, a second straight futures decline as the May contract heads to expiration Wednesday, and expectations of a bearishly large storage injection to be reported Thursday, chances are good that physical gas will keep softening Wednesday, sources said. About the only support the cash market can find currently is the contango formation of the Nymex strip continuing to encourage strong storage injections, one commented.

The heating load that sparked price rises for the weekend and on Monday hasn’t entirely disappeared yet — it’s just much diminished. Wet snow will resurface Wednesday in parts of the Upper Midwest and High Plains, The Weather Channel (TWC) reported, although it’s unlikely to have nearly the impact of a weekend snowstorm. And Canadian and Pacific weather systems will combine to bring colder air and snow showers to the northern Rockies and parts of the Pacific Northwest, TWC said. That isn’t expected to give much boost to gas prices, since much of the affected area is relatively sparsely populated.

It’s getting colder again in Western Canada, reported a Calgary-based producer. The local high was around 70 degrees F. Monday, but dropped to about 55 Tuesday and the city is looking for 45 highs for the balance of the week, he said. He was still seeing a little Midwest heating load for Wednesday, although highs in 50s would prevail in the lower section of the region.

A Northeast utility buyer said he expects prices to keep going down Wednesday, ticking off his reasons: (1) It’s still not all that warm in the Northeast, but getting more like normal for late April; (2) storage is filling quickly; and (3) transportation capacity “is wide open.” He noted that his company can get delivered gas a bit more cheaply on Texas Eastern, even without a discount, when it’s sourced from the South Texas and East Texas rather than the pricier Louisiana supplies, but added, “We’re still asking [the pipeline] for a discount” from the Texas zones.

In bidweek action, the utility buyer reported that production-area prices moved a little higher Tuesday because of tighter basis. He said his company diversifies its monthly supplies by doing some fixed-price deals and some basis deals during bidweek, and obtains the rest as day-to-day swing.

A producer who trades the Midcontinent/Midwest also said he saw tightening basis, saying he sold at Northern Natural-Ventura Monday at minus 39 cents but that basis was more like minus 34-35 cents Tuesday because the screen went down. He said he also did Ventura and Chicago citygate deals at index plus a penny Monday, but did another Chicago sale Tuesday at the NGI index minus 3 cents while the screen was at $7.06. He expected the citygate to trade around index flat Wednesday because of the screen strengthening in Tuesday afternoon Access activity.

Only South Texas is expected to experience above normal temperatures in the National Weather Service’s (NWS) six-to-10-day forecast for the May 2-6 workweek. It predicts below normal readings for most of the nation; more specifically, below normal everywhere east and north of a line that runs vertically through central Washington and Oregon, curves eastward through northern Nevada and Utah and heads southeastward through central New Mexico before running in a generally easterly direction from central Texas to southern South Carolina.

Lehman Brothers analyst Thomas Driscoll is forecasting a storage injection of 90 Bcf to be reported for the week ending April 22. Citigroup’s Kyle Cooper looks for an injection in the range of 68-78 Bcf.

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