Flat

Nearly unchanged pricing dominated the cash market Wednesday. Most points ranged from flat to a little more than a dime higher or about 15 cents lower as colder weather forecasts in several regions were largely offset by the May futures contract’s decline of 24.5 cents a day earlier. Declining quotes handily outnumbered gains.

Prices that were flat to about 15 cents higher at several western points averted a clean sweep of cash market softness Monday. Overall, traders responded to prospects for spring-like weather with little heating load in most areas this week, along with Friday’s futures dip of 15.6 cents, by pushing prices anywhere from a couple of pennies to about 45 cents lower at a solid majority of points. Many of the largest losses were concentrated at Midwest and Northeast citygates.

Feeding on recent futures strength and slight cooling trends in northern market areas, prices ranged from flat to about 40 cents higher at a large majority of points Wednesday. Texas Eastern-Kosciusko in the Gulf Coast and Transco Zone 6-New York City were the only contrarian points to see modest losses of up to a nickel.

With annual production growth rates plummeting from 50% in the late 1990s to flat in 2004, there are clear signs that the Gulf of Mexico has matured. While the recent extended well test of the Jack field in the Lower Tertiary play in the deepwater Gulf holds promise for a production resurgence, significant challenges and enormous risks still cloud the region’s future, according to Gero Farruggio, U.S. Gulf research manager for consulting firm Wood Mackenzie.

With annual production growth rates plummeting from 50% in the late 1990s to flat in 2004, there are clear signs that the Gulf of Mexico has matured. While the recent extended well test of the Jack field in the Lower Tertiary play in the deepwater Gulf holds promise for a production resurgence, significant challenges and enormous risks still cloud the region’s future, according to Gero Farruggio, U.S. Gulf research manager for consulting firm Wood Mackenzie.

A flat ANR ML-7 was the sole exception to rising cash prices Tuesday. The market was able to continue this week’s overall rally so far despite support from weather fundamentals getting even weaker and neutral screen guidance from Monday. However, one source speculated that last week’s softness late in the week may be drawing out storage buying bargain-hunters and possibly some fuel switchers now that prices are considerably lower than earlier this year.

Flat quotes for Questar made it the only point failing to bow to weak fundamentals and five straight prior trading days of falling futures Thursday. The rest of the cash market saw price drops ranging from a little less than a nickel to about 55 cents.

Except for flat performances at Kingsgate and Texas Eastern M-2, weekend prices dropped at all points in Friday’s trading. Support from a strong screen Thursday and from very hot weather continuing across the South and in much of the West was unable to overcome the decline in power generation load in key northern market areas and the weekend’s typical loss in industrial demand.

Thursday’s cash market was almost a repeat of the one the day before, with few points straying more than a few pennies up or down from flat. Many were unchanged from Wednesday averages as retreating cooling load in the Northeast and Midwest reached a virtual tie with a modest prior-day futures advance in influencing cash numbers.