Flat

In what was likely the calm before the storm, natural gas prices slid quietly to either side of unchanged Wednesday as traders elected to wait for fresh storage and weather news due out on Thursday. At the closing bell the December contract was 0.7 cents lower at $4.254. Estimated volume was proof of the quiet trading, with only 74,943 contracts changing hands.

In what was often characterized as a quiet trading day, prices were flat to mildly higher Tuesday in the East and moderately softer at most western points. Gains were capped at 5-6 cents, while Rockies and San Juan Basin declines of about a dime topped the losses.

Numbers falling as low as the mid $0.40s in the Rockies and a flat Transco Zone 6-NYC belied an overall stronger cash market Tuesday. Excluding the Rockies and Transco citygate, gains ranged from about a nickel to about 20 cents, with those in the low to mid teens most common.

Prices ranged from flat to about a dime higher in nearly all cases Thursday. Most gains were generally small at around a nickel or less. Only San Juan Basin and Iroquois Zone 2 recorded marginal losses of 2-3 cents.

Prices ranged from flat to mostly moderately higher Friday in all regions except the Rockies. They got some follow-through momentum from Thursday’s screen run-up following a below-expectations storage report, and traders also were looking ahead to the return of Northeast temperatures in the 90s as this week begins.

Most of the market was moderately firmer Thursday, ranging flat to about 15 cents higher. A majority of gains were small at a nickel or less. But the Northeast apparently was anticipating a cool front moving into its northern half Friday, because area citygates dropped by sizeable amounts, topped out by a dollar-plus plunge at Transco Zone 6-New York City, which put on a volatility show during the day between $3.50 and $9.00.

The August aftermarket started out Wednesday flat to moderately up from end-of-July numbers in most cases, although the Rockies, California and some Northeast citygates dropped by varying amounts up to nearly a quarter. Comparisons to apparent first-of-month indexes were mixed, with swing prices tending to be above index by 10-30 cents in the East, but many western points falling short of index levels.

The gas and power marketing and trading business put in a poor financial performance in the first quarter compared to the extremely profitable first quarter of 2001, and gas and electric distribution utilities came in with only average results, according to a detailed analysis by Energy Performance Review (EPR), a Maryland-based information services firm. EPR examined aggregate first quarter results for 117 gas and power companies.

Despite the recent run-up in natural gas prices, the U.S. Energy Department believes a shift to the downside is likely because of excess storage, more than adequate production capacity and only a moderate increase in demand. The downturn will come “once the summer season starts and the weakness of (storage) injection-related wellhead demand becomes more apparent,” according to the Short-Term Energy Outlook issued last week.