As expected, weekend prices took a steep plunge in Friday’strading as almost every point fell by around 20 cents or more. Thebiggest drops of almost 40 cents occurred at the SouthernCalifornia border and PG&E citygate, where both majordistributors had widely anticipated high-inventory OFOs in placefor Saturday.
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Expectations of Weekend Price Plunge Fulfilled
When futures took a steep dive after cash trading had beencompleted Thursday, it didn’t take a rocket scientist to predictthat cash prices would be headed into the dumpster Friday. Sureenough, quotes for the weekend were way down. Most of the declineswere between 10 and 25 cents, but some in Appalachia and theNortheast reached the 40-50 cents range. The smaller drops tendedto be concentrated at western points.
November Quotes Dive With Screen; Swing Fall Mild
With the futures screen “crashing and burning,” as a producerdescribed it, November bidweek numbers also took a tumble Thursday.However, because much of the futures plunge occurred after swingtrading for today’s flow had been completed, incremental pricesgenerally were down only a nickel or so.
Screen Takes a Dive, and Cash Tries to Catch Up
How quickly the market can change! Just two days after finishinga bidweek that saw indexes climb 30 cents or more, traders tookcash prices down Thursday to levels looking much more like Augustindexes than those of September. It was a rare point that managedto avoid a double-digit decline, and some registered drops of 20cents or more.
November Prices Dive; Bidweek a Little Softer
The cash market for the concluding days of November hadsomething in common with the famed cliff divers of Acapulco:breathtakingly steep plunges. “You better hope you sold your gasearly” Wednesday because there was almost no demand for the longholiday weekend, a marketer said, “and you just can’t cook thoseThanksgiving turkeys long enough [in gas ovens] to boost demand.”
Price Drops Range From a Penny to About a Dime
Lacking much else in motivational factors beyond Tuesday’sfutures dive, cash prices softened Wednesday as expected.Across-the-board decreases ranged from barely a penny to as much asa dime. A Midcontinent marketer was surprised the drops weren’t anygreater than 2-5 cents in her region.
Prices Slide Into Weekend; Western Dive Steepest
Bears roamed the gas price forest with impunity Friday, sendingall markets down at least a nickel or so and causing severalWestern points to crater. Continued steamy weather in the Southeastand Midcontinent was no match for relatively mild conditions in themajor market areas of the Northeast, Midwest and West Coast. Andthe screen’s drop of about 4 cents didn’t lend any support.
The News From The Merc Is No Better For Bulls
The May Nymex contract continued its spirited dive into lowerterritory Thursday by falling another 7.0 cents to settle at$3.328. May has now lost nearly a quarter since Tuesday, andestimated volume has totaled more than 250,000 contracts over thelast two days. “The amount of trading volume has been incredible.Of course, open interest had been at an all time high, so theseheavier trading days should be expected. Much of this is the workof speculative funds who continue to take profits and exit theiropen positions ahead of May’s expiration next Tuesday,” a sourcetold GPI.