Predictably, cash numbers emulated the expiration-day plunge in May futures by taking swan dives themselves Thursday. A widespread dearth of significant weather-related demand only threw more fuel on the price fire sale, and the announcement of a sizeable storage injection heaped on a little extra bearishness in late business.

With losses ranging from about 35 cents to half a dollar, nearly all points fell further than Wednesday’s screen slide of 37.2 cents.

Because of the weekend transition between months, Thursday’s deals were done through Saturday. The inclusion of a weekend flow date, with its accompanying slump in industrial load, may have caused a slight extra weakening of prices, one source postulated. The declines left April-ending numbers at least a quarter or more below April first-of-month indexes except for Westcoast Station 2, which was about 15 cents under index.

The Energy Information Administration satisfied prior expectations well in reporting a 73 Bcf storage injection for the week ending April 22. The Nymex reaction was rather blase with little immediate futures movement following the report and later rebounding from their softer early position in sympathy with a rally in oil-related futures after crude had plunged below $50/bbl at one point. June natural gas futures wound up the day just over a nickel lower.

The oil rally reportedly was spurred by the midday collision of an oil tanker and a crew ship that forced the closure of the Sabine Channel that goes from the Gulf of Mexico between the Texas and Louisiana borders. The channel allows ship traffic to access the “Golden Triangle” area of southeast Texas. Formed by the cities of Beaumont, Port Arthur and Orange, the Golden Triangle is the home of numerous refineries and petrochemical plants.

Prices will have a little weather support from cold fronts moving through the Midwest and Northeast from Friday into the weekend that could bring a little snow with them. However, a rise in temperatures in the South that could have juiced up air conditioning load in the region Thursday was due to end by the weekend as another cold front moves in.

There was no doubt that the rebound in natural gas futures was prompted by oil’s late strength, a producer said. Temperatures in the lower Northeast, which he trades were in the mid 60s Thursday, which won’t get many furnaces turned on, he said. There was little demand for either power generation or heating at Northeast citygates, he added.

The producer doubted whether any bidweek business was still going on Thursday afternoon, saying he thought most May baseload got traded on Monday and Tuesday. Thus the expiration-day screen plunge shouldn’t affect very many fixed-price deals, he said, but would have heavy impact on basis trading that depended on the last-day futures number. Most basis deals are done that way, the producer said, although some use the average of the last three days in the existence of the prompt-month contract.

Looking ahead, the producer said Texas Eastern looks like the pipe to the Northeast that will be most constrained by May maintenance. He found it difficult to understand why Texas Eastern’s Texas pools have gotten rather illiquid in the last year or two, especially the one in South Texas where he used to see 100 MMcf/d or more trade on any given day.

“It was nice to see that last-day plunge in futures,” said an industrial end-user who added that the market hadn’t seen such a big move to the downside in a long time. It was a pretty routine bidweek with plenty of supply available, he went on, but it was a little more difficult to find price discovery this time, partly because of the screen dive as May futures went off the board. He said most of his basis deals were triggered when the screen was “just under $7.” Although his company has plants around the U.S. and Canada, the Chicago area where the end-user resided was expected to stay cool through the weekend with highs in the 50s, but 70s readings are due next week, he said.

A Midcontinent/Southwest marketer said she was still trying to finish May trading Thursday afternoon. Naturally the big screen loss on Wednesday caused Thursday’s bidweek prices to be much lower than their early-week levels, she added. The marketer reported these May numbers in deals done Thursday: Panhandle Eastern in the mid $6.10s, Waha in the mid to high $6.00s, and El Paso-Permian on either side of $6.10.

©Copyright 2005Intelligence Press Inc. All rights reserved. The preceding news reportmay not be republished or redistributed, in whole or in part, in anyform, without prior written consent of Intelligence Press, Inc.