Drop

Even with hotter weather spreading into the Northeast, prices continued to fall at all but a few points Wednesday. The previous day’s futures drop of 5.4 cents and growing concerns about soaring storage inventories portending limited options for placing spot gas down the road were believed to be the market’s chief bearish influences.

Despite the economic downturn and a drop in natural gas prices there has not been much of a decline in demand, according to Steven Reich, deputy director of the Division of Market Oversight in FERC’s Office of Enforcement.

Despite the economic downturn and a drop in natural gas prices there has not been much of a decline in demand, according to Steven Reich, acting director of FERC’s Office of Enforcement.

While the cause of Wednesday’s rally in natural gas futures remains up for debate, the reality is that the June contract erased Tuesday’s 11-cent drop by climbing most of the day to close at $3.887, up 27.2 cents from Tuesday’s finish. The talk among traders on the day was that the upward price action was caused by fund buying, a rupture on Panhandle Eastern Pipe Line, Jim Cramer’s bullish prognosis, or some mixture of the three.

Despite little appreciable increase in significant weather-based load, a 3-cent drop by June futures a day earlier and the weekend impact on lowering industrial demand, cash prices were able to realize modest gains at most points Friday.

Influenced by a multi-dollar drop per barrel in crude oil futures, May natural gas futures dropped to a new low for the down move Monday before rebounding to close at $3.628, up 1.8 cents from Thursday’s pre-holiday close.

St. Patrick’s Day will be warm and mostly dry in the U.S., according to The Weather Channel (TWC). That sounded like as good a reason as any for gas prices to drop at nearly all points Monday, although the previous Friday’s 6.3-cent decline by April futures also contributed to the cash market softness.

Cash prices fell virtually across the board Friday, depressed by forecasts of moderate weather in most regions and the previous day’s drop of just over a quarter by April futures. The decline of industrial load during a weekend was an additional, albeit minor, bearish influence.

The swift drop in the natural gas drilling rig count across the Rocky Mountains has led to double-digit declines for some drilling services, and more are expected in the months ahead, Bill Barrett Corp. officials said Tuesday. Lower service costs will help the independent keep its costs in line, but it also is preparing for what may be “radical” changes in gas prices through the year, said CEO Fred Barrett.