Dips

A few flat to about a nickel higher points in the Rockies, where Wednesday lows were due to sink into the teens, were the exceptions to price dips throughout the rest of the market Tuesday. A futures decline of 9.7 cents a day earlier contributed to the bearishness along with analyst reports of early February forecasts indicating that the weather would not be quite as cold as previously expected.

Other than steep declines at Northeast citygates, last week’s market ended quietly Friday with moderate dips in most cases, but with several points (mostly in the West and Midcontinent) registering as flat to as much as about 15 cents higher. Fairly moderate weather in many areas, heavy storage withdrawals and the weekend drop in industrial load were the dominant influences, but they were obviously offset at some points by localized heating demand and modest support from the previous day’s screen.

With super-cold weather not yet arrived but on the way, Northeast citygates soared Thursday, with some points rising a dollar or more. But otherwise there wasn’t much price strength to be found in trading for the long holiday weekend. Gulf Coast numbers were mixed, and quotes for the Midcontinent/Midwest and West fell uniformly.

Reacting primarily to the previous day’s meltdown in energy futures, with a side nod to the general lack of substantive weather-related load outside the northern half of the West and to overflowing storage inventories, the cash market was in massive retreat Thursday. Losses exceeded a dollar across the board, with many points falling more than a dollar and a half.

Reacting primarily to the previous day’s meltdown in energy futures, with a side nod to the general lack of substantive weather-related load outside the northern half of the West and to overflowing storage inventories, the cash market was in massive retreat Thursday. Losses exceeded a dollar across the board, with many points falling more than a dollar and a half.

As anticipated, the previous day’s futures plunge of nearly 30 cents was reflected by overall softness in Tuesday’s cash market. But there was enough hot weather demand to distribute pockets of flat to higher prices here and there.

Regional variations in upward price trends tended to even out a bit Tuesday. With scattered exceptions, nearly all points were united in seeing gains ranging from a little less than 15 cents to about 35 cents; however, the lion’s share of increases were clustered around the 20-25 cents range. The primary skewing came in most of the smaller gains being recorded in the West.

The mild firming that had marked most trading in the first two days of this week switched to mild softening Wednesday. Temperature fundamentals remain benign in most regions. The screen slipped for the third day in a row, although Wednesday’s dip, like Tuesday’s, was small at only a couple of pennies or so. And traders are expecting another large storage injection report Thursday morning to whack another chunk out of the year-on-year deficit.

Putting hurricane worries aside for at least the weekend, traders bowed Friday to near-term forecasts of mild to cool weather in most of the U.S. and Canada and the bearish day-later reverberations of a storage injection report that wasn’t much shy of 100 Bcf. Nearly all points recorded double-digit losses; the overall range was from less than a dime to 30 cents.