A major revision in the April weather forecast coming back from the Easter weekend took a big chunk out of natural gas forward prices for the period ending April 8. The short work week ended with the May contract down an average 10.0 cents and the balance of summer (May-October) off 7.0 cents, according to…
Articles from Easter
Soaring citygate numbers in the Northeast, where a major Nor’easter was forecast to develop during the weekend, ran against the grain of falling prices everywhere else Friday. Weather moderation was expected to begin in some areas early this week, and a prior-day 21.5-cent decline by January futures along with the decline of industrial load that occurs during a weekend contributed further negative guidance for Friday’s cash market.
A few citygates in the Northeast, which was still feeling the effects of a “Nor’easter” storm that battered much of the East Coast over the weekend, managed to range from flat to up 20 cents Monday. They were in a distinct minority, though. Other cash points continued to move lower due to dwindling heating load and the residual impact of Friday’s 12.3-cent decline by May futures.
Finding little of significance in new price influences upon emerging from the Easter weekend, virtually all of the cash market was content to mark time Monday. Outside of declines ranging to nearly a quarter in the Rockies, most other points stayed within about a nickel up or down from flat. There was a slight bias to the upside.
California legislators and regulators returned to work after the Easter holiday with a full plate of actions pending in the state’s electricity crisis, including the implementation of last week’s agreement between the governor and Southern California Edison Co. Meanwhile, the negative fallout from the utilities’ credit-worthiness problems continues to add pressure for faster state action.
The market went into the long Good Friday/Easter weekend Thursday with the anticipated softness associated with generally mild weather and the typical demand slump of a holiday period. Activity and volatility were noticeably quieter than usual, several traders said.
“We could call it ‘the blizzard that wasn’t,'” jested a marketerin reference to the Nor’easter that had been billed as the firstbig winter storm of the year in the Northeast but turned out to berelatively benign after all. It and other market factors werelosing their price-boosting punch Tuesday, with the result thatnearly all points ranged from flat to about 20 cents lower. Thestandout exception to the general market was a Southern Californiaborder plunge of more than $5.
Six inches of snow in New York wasn’t enough to convince futurestraders to resume the up-trend the American Gas Association storagereport so thoroughly wiped out last week. The April contract movedsharply lower for the third session in a row, closing down 4.2cents to $1.717. Shortly before the close, the contract broke belowwhat was deemed a key support level at $1.70 to post a low of$1.695 for the day. The $1.755 high was reached just after theopening bell.