Divided

While the major commodity exchanges were divided over the effectiveness of broad-based position limits, the head of the Commodity Futures Trading Commission (CFTC) Tuesday indicated that the agency was clearly headed in this direction for trading in the energy futures markets.

The cash market was approximately evenly divided between rising and falling points Thursday, with most of the newfound firmness following Wednesday’s drops at nearly all locations based on moderate prior-day screen support and residual cold in sections of the West. The overall weather outlook was bearish as temperatures in most areas are forecast to be above seasonal levels Friday.

Friday’s launch of the February aftermarket was almost evenly divided between rising and falling points, but gains moderately outnumbered the losses. Frigid weather will be returning early this week in some areas, and Friday’s cash market had extra support from the previous day’s increase of 15.6 cents by March futures.

The cash market was approximately evenly divided between higher and lower points Friday, but taking into account the losses being much larger than the gains, it was definitely an overall down day.

A previously divided cash market came together for an impressive show of unity Tuesday as NGPL’s TexOk zone was the only point to show a decline (a little less than a dime). Prices were flat to higher in the rest of the market, deriving support from the previous day’s increase of 13.7 cents by October futures and further indications that ongoing outages of significant amounts of Gulf of Mexico (GOM) supplies are having more of a price impact as they continue to accumulate.

Cash prices were close to evenly divided between gains and losses Monday, with falling points slightly outnumbering the rising ones. On the first official day of fall the market was seeing mostly seasonal weather; that is, it was hot enough in the desert Southwest for Phoenix to have a triple-digit high in the forecast for Tuesday but only warm in the South (highs throughout the 80s) and mild to cool almost everywhere else. Although sporadic and modest heating load has shown up in the last week or so in areas on either side of the Canadian border, it is not yet a significant market factor.

Thursday’s cash market pretty much divided along the lines of what markets would be most affected by Hurricane Ike-related production outages and those that would feel relatively little impact. Prices continued to rise at most locations in the Gulf Coast and Northeast, while the Midcontinent/Midwest and West were mostly softer. Weather remains a minor market factor as few areas outside the desert Southwest have any substantive cooling load remaining.

The market was almost evenly divided between mostly small gains and losses Tuesday but leaning slightly to the downside — even more so if one gives extra weight to the huge declines in the Rockies that took quotes as low as 40 cents and left a couple of points averaging less than a dollar. Much of the U.S. is in a transition period from unusual recent heat to temperatures more befitting the approach of mid-October.

The cash market turned in a mixed performance Monday that was almost evenly divided among rising and falling points but leaned slightly to the upside. A bit of cooling load in the South and heating load in the West provided support, while forecasts of normal to above normal temperatures in northern market areas (along with Friday’s nickel drop by April futures) dragged some points lower.