Cooling

With heating load continuing to recede and replacement cooling demand still missing in action for the most part, prices fell at nearly all points Thursday. Although softness had replaced firmness as the dominant characteristic of price movement, near-flat numbers were still in vogue as few points changed by a dime or more.

The cash market defied the ostensibly bullish influences of the Northeast and Rockies joining the Midwest in cooling trends that would take low temperatures to around freezing or less at most locations Thursday. Instead it preferred to be guided more by the previous day’s fall of 26.4 cents by March futures in posting losses at most points Wednesday.

Developing La Nina conditions — the cooling of ocean surface temperatures off the western coast of South America, which have been found to disrupt normal weather patterns in the United States — are likely to continue into spring, according to the National Oceanic and Atmospheric Administration (NOAA).

Developing La Nina conditions — the cooling of ocean surface temperatures off the western coast of South America, which have been found to disrupt normal weather patterns in the United States — are likely to continue into spring, according to the National Oceanic and Atmospheric Administration (NOAA).

A futures swoon of about $1.21 over the previous two days, abetted by further erosion of cooling load in some areas, led to further declines in most of the cash market Wednesday.

Driven largely by a futures plunge of 60 cents a day earlier, cash prices fell by large amounts at all but one point Tuesday. Slightly diminishing cooling load in several areas and the growing certainty that Hurricane Bertha will remain a nonevent for Gulf of Mexico production added to the bearish mood.

Prices continued to rise at most points Tuesday on the support of widespread cooling load and the previous day’s 15.5-cent advance by August futures. However, there were signs that this week’s overall bullishness so far in the cash market could be starting to fade as many of Tuesday’s gains were about a dime or less and there was a sharp increase of sizeable losses, especially in the Southwest basins, California and Midcontinent.

The cash market used Wednesday’s expiration-day increase of 11.5 cents by June futures and moderate increases of cooling load in the South to range from flat to about 35 cents higher Thursday at most points in the Gulf Coast, Northeast and Midwest. However, mild weather in much of the West and excess supply issues resulted in sizeable price drops throughout the West and Midcontinent. Some western plunges exceeded a dollar.

Forecasts indicating dwindling heating load in the Northeast and less cooling load in the western half of the South, abetted by the previous day’s drop of 23.6 cents by June futures, caused cash prices to sink at most points Tuesday. But although transport-constricted San Juan Basin numbers continued to fall, Rockies points recovered some of the major price ground they had yielded Monday.