Despite starting to lose heating load again, the cash market relied on residual support from Friday’s 16.3-cent screen gain and strong demand from power generators to rack up increases in double digits at all points Monday. As usual, the post-weekend restoration of industrial load also was a factor.

Gains ranged from a little more than a dime to about 30 cents, and were distributed fairly evenly among various market areas. A solid majority were around 20 cents or more.

Sources were doubtful whether upward momentum in prices could be sustained Tuesday. The weekend storm that left copious amounts of wet snow in parts of the Upper Midwest had passed, one said, and although Midwestern temperatures would still be below seasonal norms Tuesday, both that region and Northeast are in the process of moderating from unusual weekend cold blasts. Highs in the Northeast Tuesday will be mostly in the 60s, according to The Weather Channel (TWC).

And the forecast of a “cold front” moving into the South was somewhat deceptive because its major impact would be a lot of liquid — not frozen — precipitation and possibly tornadoes, TWC said. It expected high temperatures to range from the 50s in the southern Appalachians to the low 90s in South Texas. Western thermometer levels are likely to remain slightly above to slightly below normal readings for this time of year.

Another bearish influence for Tuesday pricing was the loss of prior-day futures backing. The natural gas screen was around a dime higher earlier, but eroded in value as the day went on to close out down 4.2 cents. Numbers in Nymex’s petroleum products complex also saw moderate losses. One trader noted that the natural gas contract didn’t start getting appreciably weaker until after cash trading was finished.

“I don’t have a good handle” on why prices were so strong again Monday, said a Northeast trader, because spring-like conditions would be returning to the region Tuesday. He said he supposed that Friday’s screen strength may have been part of the equation, but wasn’t sure.

But a marketer in the Lower Midwest thought a lot of Monday’s price strength was derived from purchases by power generators. Their loads over the weekend in the frigid Midwest and Northeast got big enough to create imbalances in gas supply, so people were “buying for payback,” he said.

The marketer said the weekend snow didn’t get as far south as his city, “but we had frost, which means it was freezing.” He remarked that he didn’t like snow anyway, at least not in late April. “It’s OK in December and January, but not now. However, we’ll probably get one more snowfall” before winter finally hangs it up.

Midwest heating load was already starting to fade Monday, so for that reason and the softer screen, he expects cash prices to be a little weaker Tuesday. He noted that Chicago citygates traded above the screen Monday, “but I don’t expect that to happen again Tuesday.”

The marketer had the distinct impression that bidweek traders were “mostly taking it easy” in the early going because his company hadn’t seen much activity yet. “I had a couple of counterparties tell me they also were wondering why May business was so dead at this point, he said. He reported Chicago basis of minus 4-3 cents Monday, and added that like late last week, index deals were still going for the NGI index plus a penny.

©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.