Flat

Last week’s reminder that winter actually can be quite cold at times (a fact that some traders might have forgotten during yet another mild heating season) was starting to fade as scheduled Friday in parts of the East, but severe weather was either tightening or reasserting its grip from the Rockies through the Midcontinent/Midwest. The result was mildly higher weekend pricing in the still-frigid regions, while flatness prevailed in most of the rest of the market. Northeast and Florida citygates sustained the only significant losses as they continued retreating from midweek spikes.

Cold temperatures expected over the weekend and the continuation of strong cash market prices were enough to dissuade sellers from pressing the natural gas futures market lower Friday. At the same time, buyers were hesitant to push their luck following the recent run to seven-week continuation chart highs. As a result, the April contract was left to chop lazily sideways ahead of the weekend on light volume of 71,786 contracts. The prompt month finished at $2.359, up 0.2 cents for the session, but down 4.1 cents from its $2.40 open last Monday.

Nearly all points ranged from flat to down about a nickel or less Monday, but several sources regarded that as a relatively firm performance in light of the market’s generally bearish outlook. The Northeast was a bastion of strength with double-digit citygate increases, led by a gain of more than 45 cents at the Algonquin Citygate.

Mostly flat numbers made it three days in a row Monday as the dominant market characteristic. Whereas small declines outweighed the small upticks on Friday, there was more of a tendency toward slightly higher pricing yesterday.

A slightly more positive set of weather fundamentals kept flat numbers dominant in weekend trading Friday. There was a slight bias toward the downside, but few points fell by more than 1-2 cents.

“Flat” was the word of the day in the gas market Thursday. No point varied by more than a nickel from unchanged, and a large majority of them either showed no change or were up or down by only a penny or two.

In a move usually reserved for the late stages of acquisitions — and unheard of less than a month after an initial agreement — Dynegy Corp. is in advanced discussions with Enron Corp. to renegotiate its merger offer of Nov. 9 to acquire the Houston-based rival. According to sources, Dynegy wants to reduce the all-stock transaction price by more than 40%, which would put its share price at about $6. Enron closed at $4.11 on Tuesday, 10 cents above its Monday close.

After some dalliance with flat pricing over the previous couple of days, the cash market Friday finally assumed the total softening mode that many had believed was its rightful status all along. Few points failed to fall less than a dime, but drops of more than 20 cents were largely confined to the San Juan/Rockies and border-SoCalGas markets.

Wednesday’s cash market was almost a repeat of activity the day before, with flat to mildly higher numbers dominating across the board. Bet on a radical change from that staidness today, though. After AGA announced both a large upward revision of last week’s widely derided 3 Bcf storage injection figure plus a new increase that exceeded nearly all expectations, the screen responded with a dive of more than 30 cents.