Frigid

In spite of frigid weather remaining in place throughout much of the U.S. and Canada and prior-day screen support having returned the day before, prices were in retreat at most Gulf Coast, Midwest and Northeast points Tuesday. However, the Midcontinent and West continued to advance in nearly all cases, which was hardly surprising considering Wednesday lows are expected to range from the 20s and 30s to single digits in those regions.

Despite forecasts of frigid weather remaining in the Rockies and temperatures continuing to descend Friday in the Midwest, Northeast and South, the cash market’s upward momentum of the first three days in the week was arrested to some extent Thursday. Price direction was mixed but biased slightly to the downside amid quotes that mostly were less than a dime up or down from unchanged.

As expected, a serious warming trend due to start Friday following widespread frigid weather at midweek induced softer prices at most points Thursday. Northeast citygates, which had seen huge spikes on Wednesday, recorded equally spectacular plunges Thursday.

Prices continued to rise at most points Thursday as frigid temperatures and various types of frozen precipitation (sleet, freezing rain and snow) occupied more and more of the U.S. and Canada. A 32.3-cent spike by January futures on Wednesday gave extra support to Thursday’s cash market.

Just when many people thought it was safe to say goodbye to winter, frigid temperatures once again occupied a large swath of high natural gas-demand regions, putting upward pressure on cash prices in a number of areas around the United States. For a second day in a row, Transco Zone 6 NY on Tuesday saw a high of $20 while averaging more than $17.50, an increase of more than $5/MMBtu from Monday’s average. Most other Northeast points also saw gains

With last week’s blasts of frigid weather only a memory in many areas, cash prices were overwhelmingly lower at most points Tuesday. Many locations in the Northeast and Gulf Coast plummeted by triple-digit amounts. Only some points in the Rockies, Pacific Northwest and Western Canada, where below-normal temperatures will be concentrated this week, ran against the overall market grain with numbers that were flat to about a nickel higher.

Thursday’s 51.6-cent futures slide and the weekend loss of industrial load were able to trump frigid weather either continuing or being reestablished over the weekend as the prevailing influences on Friday’s cash market. The result was flat to lower prices at a large majority of points.

On a day when some areas were experiencing their most frigid weather in the heating season so far, expectations that considerably more moderate conditions would be in place by early this week (Dec. 11-15) forced prices lower at nearly all points Friday. The nickel-plus drop by January futures a day earlier, bearish sentiment about the latest storage report and the decline of industrial load that typically accompanies a weekend also were negative factors in the cash market.

With frigid cold engulfing large portions of the country and winter storms sweeping east, natural gas futures traders pushed the January contract on Thursday to a high of $15.100, a new all-time high for any prompt month, unseating the old record of $14.750 that was set by the November 2005 futures contract on Oct. 5. January natural gas ended up settling at a new all-time prompt month high settle Thursday at $14.994, up an incredible $1.294 for the day.