Climb

The cash market resumed its climb Thursday, buoyed by a risingHenry Hub futures contract, a tightening supply situation,spreading cold weather and air conditioning load from Texas throughthe Southeast. A “lean” storage report Wednesday afternoon added tobullish sentiment, a marketer said.

The cash market shrugged off Tuesday’s modest weakening toresume an upward climb Wednesday. Yesterday’s gains weren’t aslarge as those on Monday (mostly 5-10 cents compared with 10-20cents, respectively). Also unlike Monday’s trading, there was nogeographical divergence with Western increases being significantlyless than the East’s; the Wednesday upticks were mixed relativelyequally in both areas.

The strong corrective rebound of the April contract seemed indanger of coming to an end yesterday morning when the contract setnew lows for the week at $1.835, but April held and quickly resumedits upward path in afternoon trade to post a new high at $1.930 andclose the day at $1.928/MMBtu.

If pipeline and LDC rates continue their upward climb, the”inevitable result” will be a sharp decline in producers’ wellheadrevenues and a subsequent “significant loss” of natural gassupplies, an official of a major producer group said Monday.

Cash prices continued going up at most points Wednesday, oftenrepeating Tuesday’s gains of between 3 and 9 cents. Butshell-shocked traders were more interested in discussing what onecalled the “precipitous” drop in May futures and its implicationsfor both April and May cash numbers. “I’d bet a lot of people gotcaught with their pants down” by the screen’s plunge, a marketersaid. Several sources said the Nymex drop caused daily cash dealsdone late to fall.