Cooling

Based primarily on the previous day’s 25.1-cent run-up by October futures, but also getting a slight boost from a pinch of extra cooling load returning to the desert Southwest and parts of the South along with forecasts of Friday lows in the 30s in upstate New York and some New England locations, the cash market was flat to higher across the board Thursday.

The cash market managed to scrape together enough cooling demand to record gains at virtually all points Monday, even with the negative guidance of the previous Friday’s 9-cent decline by September futures. The return of industrial load from its weekend decline provided a little additional support.

Considering forecasts of weekend cooling trends in the Midwest and Rockies, it was hardly surprising that Thursday’s 24.3-cent dive by August futures was able to induce losses at all points in the cash market Friday. Naturally, the typical weekend drop of industrial load also played a part.

It mystified traders, but prices were flat to about half a dollar higher across the board Tuesday despite cooling load being light outside the southern U.S. and the previous day’s 12.8-cent decline by August futures.

Prices continued to fall at nearly all points Monday as summertime cooling load was fairly light outside the southern third of the U.S. The previous Thursday’s downturn of 18 cents by August futures was a further negative influence on the cash market, and the return of industrial demand from a holiday weekend proved to have essentially no bullish impact.

The cash market succumbed to a growing dearth of cooling load in the Midwest, Northeast and Canada by dropping at most points Tuesday. It also felt negative pressure from the previous day’s 16.1-cent decline by August futures.

Cooling load is increasing in the South and lows in the 30 and 40s were still in the forecast for Wednesday in much of the northern West through the Upper Plains into sections of the Midwest, Northeast and Eastern Canada. Yet the cash market still appeared to be sustaining a recent streak of gains at nearly all points Tuesday more on psychological factors than on any basis fundamental demand.

Although The Weather Channel’s forecast for Tuesday in Florida called for a bit of cooling, Florida Gas Transmission not only kept an Overage Alert for market-area customers going into its 11th day Tuesday but also tightened the tolerance for negative daily imbalances to 10% from the 25% that had been in effect since the first Overage Alert Day on May 2.

It wasn’t much, but the market could claim a little more of both heating and cooling load in posting solid double-digit increases at all points Thursday. However, cash quotes continued to depend more on prior-day screen support and a general sense that global economic woes may be starting to lessen in extending the week’s rally into its fourth day.