Couple

With its linepack projected to bump up against maximum target levels in the next couple of days, Pacific Gas & Electric issued a customer-specific OFO for Thursday.

Coming off of a couple of hectic trading weeks that saw prompt-month natural gas rally significantly in a short stretch of time only to sink just as quickly, June natural gas futures on Monday traded within a $6.570 to $6.800 range before closing at $6.695, up 14 cents on the day. Monday’s close higher halted a seven-day streak of lower settlements.

As a couple of sources had expected Friday, that day’s record-setting action in crude oil futures paved the way for a general cash gas rally Monday, even though the natural gas screen had fallen more than 8 cents going into the weekend. The return of industrial load from a weekend slump, moderately cooler weather in northern market areas to start the week and continued storage injection demand also played a part in Monday’s overall bullishness.

With at least a couple of traders starting to express boredom over a stagnant market, moderate softness remained in command at most points Tuesday. Just as they have almost every day so far in the new year, some prices swam against the general tide: several instances of flat to up to more than a quarter higher numbers were seen in the Gulf Coast, Midcontinent/Midwest and West.

Energy stocks have undergone a “very sharp, technically driven correction” in the past couple of weeks, but there should be a strong move upward through the end of the year because of higher natural gas prices this winter and upward earnings guidance for 2006, Raymond James’ energy analysts predicted in a new report.

Although most of the cash market remained in softening mode Thursday by recording losses ranging from a couple of pennies to more than 80 cents, several areas had points in the mix that were flat to as much as nearly a quarter higher. Sources suggested that the scattered rebounds and eventual screen strength were tied to growing perceptions that Hurricane Katrina-related Gulf of Mexico (GOM) shut-ins could rival those of 2004’s Hurricane Ivan for longevity.

The end of winter is still a couple of weeks away on the calendar, and the season’s physical existence is still very much in evidence in the Northeast and Midwest and to some extent in northerly sections of the South. Strong heating load in much of the East had prices on the rise Tuesday at all points and the continuation of cold weather is expected to combine with major gains in energy futures Tuesday to extend cash market firmness Wednesday.

Had the cold weather of the last couple weeks not arrived, the gas storage surplus compared to long-term historical averages would have swelled to “well over 500 Bcf.” As a result, gas market bulls have “dodged a bullet” at least temporarily, according to consultant Stephen Smith of Stephen Smith Energy Associates.

A couple of instances of flat numbers in the Northeast were conspicuous amid an overall softening Thursday. Weak fundamental weather support and falling energy futures Wednesday and Thursday prompted losses ranging from a little less than a nickel to 15 cents or so, with most declines weighing in at a dime or more.