The cash market was up strongly at all points Monday, responding to a fair amount of current heating load and the prospect of a lot more arriving before the end of the week. The return of normal industrial demand from the weekend also played a part, and a Monday morning screen spike provided some upward impetus for late cash deals, although natural gas futures later gave back much of its morning gain.
All of Monday’s increases were in double digits, although a few just barely made the cut. Upticks ranged from a little more than a dime to more than 60 cents, with the Northeast tending to record most of the largest ones while most of the smaller ones clustered in the West — a region that was starting to see some recovery from a massive winter storm that dumped several feet of snow in mountainous areas over the weekend and caused extensive flooding that extended as far east as the Ohio Valley.
Although nearly all of the South is unseasonably warm and parts of the Midwest and Northeast began the week with above normal temperatures as predicted, upper stretches of the two northern regions are experiencing highs in the teens and more southerly areas are due to join them around Thursday or Friday. In fact, an Accuweather meteorologist is looking for a “superfront” to bring extreme cold into much of the East by the end of the week (see futures story).
“We are mild here for now” with temperatures about 12 degrees above normal Monday, a lower Northeast utility buyer said, but it will be getting a lot colder near the weekend. Despite Monday’s bullishness in the physical market, he saw a little room for cash softening in the next couple of days before getting stronger again around Thursday as the cold approaches. The buyer said cash numbers also were feeling a modicum of residual screen strength from Thursday’s last uprising following a moderately larger than expected storage withdrawal report.
The buyer suspected that funds traders exiting short positions were responsible for much of the early run-up at Nymex, although he noted there had been a lot of retreating since the screen was up a half dollar at mid-morning.
While other regions were trying to recuperate from or prepare for new sieges of severe winter weather, a Texas-based producer commented on T-shirt-friendly conditions in his city, saying, “It’s definitely not January weather for us right now.” However, he said to remember that in January, “above normal” is relative and “normal” can still be very cold in the northern market areas.
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