Conditioning

As sources had expected, the nearly stationary presence of a production-disrupting tropical depression off the Louisiana coast was outweighed by the impending significant reduction of air conditioning load in much of the market and the extra decline of industrial demand associated with a holiday weekend. The result was falling prices at nearly all points Friday.

Prices rebounded by generally small amounts in most of the market Wednesday as the South is beginning to contribute more air conditioning load than earlier this week and is being abetted to a smaller degree by warming trends in the Midwest. The previous day’s screen gain of 3.9 cents also gave a modicum of positive guidance to cash numbers.

The return of moderate air conditioning load to much of the South, along with expectations that the Energy Information Administration (EIA) will be reducing production estimates through last year in its revised EIA-914 report methodology Thursday, likely were the chief basis for flat to slightly higher quotes at nearly all points Wednesday.

The return of moderate air conditioning load to much of the South, along with expectations that the Energy Information Administration (EIA) will be reducing production estimates through last year in its revised EIA-914 report methodology Thursday, likely were the chief basis for flat to slightly higher quotes at nearly all points Wednesday.

Losing a great deal of air conditioning demand in the South — without enough heating load elsewhere to compensate for it — along with a prior-day futures drop of 18.1 cents proved sufficient to reverse the two-day cash market advance that began this week. Quotes were down in a large majority of the cash market Wednesday.

Losing a great deal of air conditioning demand in the South — without enough heating load elsewhere to compensate for it — along with a prior-day futures drop of 18.1 cents proved sufficient to reverse the two-day cash market advance that began this week. Quotes were down in a large majority of the cash market Wednesday.

Most of the cash market moved higher Thursday on the basis of some air conditioning load developing in the South, pockets of chilly weather continuing in northern market areas (primarily near the Canadian border) and the previous day’s 22.8-cent futures gain capping a three-day run of firmness by the May contract.

An expansion of heat levels high enough to prompt use of gas-fired peaking generation units to meet rising air conditioning demand, abetted by a 20-cent futures advance a day earlier, resulted in weekend price gains at most points Friday. The Weather Channel (TWC) reported that with a cold front being held at bay around the Canadian border, “two-thirds of the states will see highs above 90 by Sunday.”

Finding a bit of developing heating load in the Northeast combined with continuing power generation demand for air conditioning use from the western end of the South through the desert Southwest, prices realized mostly moderate advances at most points Thursday. A modest 2.6-cent gain by June futures on Wednesday also contributed a little support to the cash market.