Flatness

Most cash prices were flat to a few cents higher Wednesday, butthere was considerable variation among specific market areas. Heavydrafting of the NOVA system led to increases of a dime or more inintra-Alberta quotes and at such related points as Sumas andStanfield. On the other hand, Appalachia/Northeast points werefalling by about a nickel or more after Northeast citygates haddisplayed the greatest price strength earlier in the week.Temperatures remained above freezing for the most part in theNortheast and Midwest, and warmer weather is predicted to startmoving in today.

A “comfort zone” was one trader’s description of the relativelyflat cash market over the last few days. And why not? After asummer chuck full of record setting temperatures and hurricanehype, supply and demand appear to have reached some semblance ofequilibrium. Many sellers saw their best prices early yesterdaybefore the market slipped lower in lackluster late morningdealings.

Despite flatness at a few mostly western points, the overallmarket pushed higher by around a nickel or so Tuesday. Electricgeneration stresses had faded in the Northeast, but early screensupport and rising air conditioning load in the South-and to amilder extent in the Midwest-combined for the cash gains.

Enough gas got traded early Thursday at prices within a penny ortwo of flat that late weakness reported at many points failed todrag down averages from Wednesday. However, the late downturns weretaken as a harbinger of continued softening today, especially withthe market subject to the normal drop in weekend demand. Themarket felt kind of juiced up Wednesday but was losing its steamThursday, according to a Southwest trader. He saw “some realsoftness” at the end in Permian Basin.

While eastern markets meandered around in a generally flatperformance Monday, the West was achieving significant gains ofabout a nickel or more. Topping the list was San Juan Basin, wheresupply outages helped drive quotes up by about 15 cents. Prices inthe Rockies, Pacific Northwest and western Canada also were strongdue to cold weather. It snowed in Calgary Monday morning, onesource said, adding this is late in the season for snow but not arecord for Calgary.

The natural gas cash market went through a second day of overallflatness Wednesday as most of the nation absorbed spring-liketemperatures on St. Patrick’s Day and calmness pervaded the futuresmarket.

The cash market, which had been fairly consistent in overallprice movement for most of last week, went into the weekendstarting to diverge on an East-West axis. While Friday’s mix ofgains and losses amounted to a generally flat wash, Eastern pointstended to be flat to about a nickel higher, and their Westerncounterparts tended to range from flat to about a nickel lower.

A break in the flat price pattern that has dominated the overallcash market during February came Tuesday, and appropriately it wasto the downside, where many sources had long expected prices to beheaded because of mild weather, a softening screen and a massivestorage surplus for this late in the winter season.

The overall tone of the cash market remained flat Thursday, buta growing number of points were recording tiny decreases. Thetouches of softness came even as an eastbound cold front reachedthe nation’s midsection, reminding regions that had beenexperiencing record seasonal warmth recently that winter isn’tquite over yet. One source speculated that prices may be finallystarting to crack under the strain of having maintained theirpositions during a long period of no fundamentals support. Even thearrival of some for-real weather fundamentals may not be enough toprovide support, he said.