Cash prices weakened across most points Friday as traders attempted to navigate the tricky three-day trading window with lower weekend demand followed by a higher demand start to the week.

On average, prices fell about 6 cents, but westbound Rockies gas along with California points had to endure double-digit weather-driven losses of as much as 20 cents. Northeast points remained strong as weather systems were expected to cause declining temperatures through the weekend into the following week. Futures trading was lackluster and at the close April had risen 2.1 cents to $2.484 and May had added 2.1 cents as well to $2.600. April crude oil tumbled $2.14 to $106.70/bbl.

At western points traders were quick to point the finger at weather-driven price weakness as moderate weekend weather was expected to follow a storm system that dumped much-needed snow in the Sierras and helped improve a so-far thin winter snowpack. “Everyone is saying it is the weather. That is what it looks like. The [West] weather is expected to be very mild,” said a West Coast trader. “Trading was definitely crazy early in the morning, but I think the decline is weather-driven.”

The mild weekend forecast follows a much-needed storm that traversed California and was especially welcome in a state hit by an especially dry winter, but officials say much more precipitation is needed to replenish water supplies and avoid reducing allotments to farmers.

Clear skies and moderate temperatures were expected to follow the storm, and Jim Mathews, a meteorologist with the National Weather Service, called the snowfall one of the more significant this winter. “We’ve had very few storms this season that have created so much snow.”

The snowfall and resultant hydro supplies will no doubt help the case for steady if not weaker natural gas prices, but water measurements indicated that the snowpack had a long way to go. Measurements on Thursday showed the water content of the snowpack at 34% of normal, the fourth-lowest reading since the 1940s, said Dave Rizzardo, chief of snow surveys for the California Department of Water Resources. Last year at this time, the snowpack was 124% of normal and reached 165% by April 1.

California points dived in trading for weekend through Monday deliveries. PG&E citygate fell more than a dime, but SoCal Border and SoCal Citygate shed 20 cents apiece.

Rockies and other points delivering to California also wavered. Quotes at Malin were 15 cents lower At El Paso South Mainline gas was quoted more than 15 cents lower.

Eastern points continued to buck the overall trend lower and enjoyed weather-driven gains, which set some points well above $4. Algonquin Citygate prices were seen rising more than 30 cents, but both Iroquois Waddington and Tennessee Zone 6 200 L joined the over $4 club and posted gains of more than 40 cents.

Forecasters were predicting a chilly start in the week to the East. “In the I-95 corridor, rain will break out tonight [Friday] (snow and ice changing to rain between Boston and Portland, ME), and there could be some fog,” said AccuWeather.com meteorologist Elliot Abrams. He calculated that once “a cold front arrives in the morning, some places could have a thunderstorm. After that, it will dry out and become colder as we go through Sunday and Monday.”

Futures traders see the market facing a day of reckoning in a couple of weeks, as a long-standing congestion pattern reaches completion. “We are at the lower end of the congestion zone now, but the apex of the [triangle] congestion pattern crosses at March 21. So sometime between now and then we will probably see some kind of directional breakout. The question is whether it will move to the downside or be a breakout to the upside,” said Brian LaRose, technical analyst with United-ICAP.

“Seasonally it looks like this market has the ability to head higher, but the fundamentals look terrible for natural gas. The bigger picture trend still points down. There’s a shot we could get to $3 by May, but we need to see some liftoff and I’m not confident the bulls can do it.”

Maybe liftoff isn’t in the cards, but analysts aren’t thinking that the cellar doors have suddenly been opened to a new and lower price regime. “Although this market posted an exaggerated response to [Thursday’s] EIA [Energy Information Administration] storage figure that only missed average street expectations by around 7-8 Bcf, we don’t anticipate much additional downside price follow through,” said Jim Ritterbusch of Ritterbusch and Associates.

He believes that market support will emerge “at around the April futures lows of about $2.44 that were established last month. Lows on a nearby futures basis to the $2.23 area appear out of reach in our opinion in view of limited speculative selling interest at these lower levels and an apparent shift in the supply-usage balances that has been developing of late. While the bearish significance of a huge supply overhang that has increased to 780 Bcf against five-year averages cannot be denied, we will reiterate that such static news is quite transparent and as such, is well discounted into the pricing structure,” Ritterbusch said.

The near-term weather outlook, however, couldn’t get much worse for the bulls. WSI Corp. of Andover, MA, in its morning 11- to 15-day outlook predicts above- to much-above-normal temperatures north and east of a broad arc extending from Virginia to Kansas to North Dakota. “Above- and much-above-normal are forecast over the southwestern U.S. and most of the eastern two-thirds of the country. Anomalies as warm as 10-15 degrees above normal are anticipated over the north-central and northeastern U.S.,” the forecaster said.

WSI said the forecast represented no change from Thursday’s outlook, but it cautioned that risks to the forecast include temperatures trending still warmer over most of the country than currently forecast excluding the West Coast. “Though they have backed off a bit this morning, medium-range models continue to display variations of a very warm pattern becoming centered over the continental U.S. near the middle of March.”

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