Cool

Despite the generally moderate to merely cool weather predicted for many areas early this week, prices were able to rally by mostly small amounts Friday at a modest majority of points in trading for Sunday-Monday flows (due to the month-to-month transition Sunday). However, an eastward-moving cold front that brought blizzard-like conditions to the Rockies earlier last week was already cooling much of the Midwest and was due to bring lower temperatures to the Northeast and much of the South eventually.

Prices continued to rise Monday at all but a few western and Midcontinent points based on unseasonably cool temperatures returning to the forecast in much of the Midwest and Northeast, mid-90s highs in the desert Southwest, the previous Friday’s 17.3-cent increase by May futures and the return of industrial load from its usual weekend decline.

Prices fell at most points Friday due to cool but relatively mild weekend weather being predicted across the southern third of the U.S., a small prior-day futures decline and the dropoff of industrial load over a weekend. Northeast citygates, forecast to see sub-freezing lows Saturday, realized gains of up to nearly 75 cents. Three flat points in the Midcontinent/Midwest also were exceptions to the overall softness.

Forecasts of moderate to cool weather in many areas, the previous day’s 8.4-cent decline in November futures and the loss of industrial load over a weekend led to price declines at all but one point Friday. With Questar’s Clay Basin storage facility shut in for testing through the middle of this week, Rockies quotes once again took the biggest hits.

Softness was moderately predominant in a mixed pricing environment Monday. Forecasts of pleasant to cool conditions Tuesday in the Midwest, Northeast and eastern end of the South resulted in drops at a majority of eastern points, although most of the Midcontinent recorded substantive gains.

The cash market recorded double-digit declines across the board Friday as the list of negative influences already in effect — moderate to cool weather in nearly every area, prior-day screen softness, splitting-at-the-seams storage inventories and the long-standing absence of a tropical storm in the Gulf of Mexico — was supplemented by the big reduction of industrial load that affects trading for a weekend.

Citing record storage inventory levels and cool weather in certain parts of the country, the Energy Information Administration (EIA) revised downward its Henry Hub spot price forecast for the year in its Short-Term Energy Outlook to $7.74/Mcf from the $8.11/Mcf that was projected last month, and ratcheted down its average price forecast for 2007 to $8.81/Mcf from its May prediction of $9.17/Mcf. But an active hurricane season, as has been predicted for this year, could cause the spot price projections to sharply reverse direction in late summer, the EIA said.

Citing record storage inventory levels and cool weather in certain parts of the country, the Energy Information Administration (EIA) revised downward its Henry Hub spot price forecast for the year in its Short-Term Energy Outlook to $7.74/Mcf from the $8.11/Mcf that was projected last month, and ratcheted down its average price forecast for 2007 to $8.81/Mcf from its May prediction of $8.39/Mcf. But an active hurricane season, as has been predicted for this year, could cause the spot price projections to sharply reverse direction in late summer, the EIA said.

Expecting it to be the complete opposite of current weather conditions, WSI Corp. said Monday that the February-April period should bring cooler-than-normal temperatures generally south and east of a line from Phoenix to Dallas to Raleigh, NC, with warmer-than-normal temperatures to be the rule elsewhere, especially in the northern tier of states.