More than one trader was surprised to see cash prices generally holding firm Thursday, defying the greater than usual industrial load slump associated with a three-day holiday weekend. Forecasts of a cold front bringing winter-like chills again to the central U.S. and the strength of energy futures Wednesday and Thursday were cited as the chief reasons in the continued rally at most non-western points.
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Prices Fall by Up to a Quarter; Friday Outlook Murky
As one source had expected (see Daily GPI, March 4), the combination of Wednesday’s screen dive and generally mild weather forecasts resulted in spot market weakness Thursday. All points were close to united in recording drops from a dime to about a quarter; most were in the mid to upper teens.
Remaining Cold Not Enough to Avert Price Drops
Spurred by Friday’s screen drop of more than a quarter and generally milder weather trends, prices dropped across the board Monday. The Northeast, despite facing a new winter storm late Monday that would continue through Tuesday, again led the market’s downhill trek with declines of around a dollar or greater.
Flatness Dominates Cash Market, But Outlook Stays Soft
With little change in overall weather fundamentals over the weekend, the cash market generally emulated the screen Monday and sat back to await further developments. Most points were about a nickel or less up or down from flat; larger gains and losses were few, scattered and capped at 15-20 cents or so.
Traders Anticipate Continuation of Softening Trend
Sources expect Tuesday’s generally mild softness to continue as air conditioning load recedes in the East and there is no near-term tropical storm threat to offshore Gulf of Mexico production. As if to reinforce their outlook, the energy futures complex experienced steep price dives Tuesday, with the August natural gas contract falling nearly a quarter and its crude oil counterpart plunging about $2 in expiration-day profit taking.
Tropical Wave, Heat Noted in Big Post-Holiday Rally
News of a tropical wave approaching the Caribbean Sea, generally warm to hot weather in most of the nation, the end of weekend OFOs on several pipes and the usual rebound in load following a long weekend were cited by sources in explaining Monday’s double-digit gains at nearly all points.
Prices Ride Nymex Slightly Higher Friday, End Week Up 30-40 Cents
Spot prices were flat to a few cents higher at most points across the continent on Friday generally in response to the continuing rise in Nymex futures prices, but transportation-related constraints also played a role. The cash market managed to add 30-40 cents for the week at most points compared to the previous Friday, while near-month futures set the tone with a solid 55-cent gain Friday to Friday.
Cold Weather Firms Northeast in Generally Flat Market
With winter displaying a surprisingly tenacious grip on Canadian and northern U.S. weather into the weekend, the market proved to be firmer Friday than many had expected. Once again flatness was the dominant price theme as most points were about a nickel or less up or down from unchanged.
Northeast Spikes Conspicuous Among Generally Flat Prices
Northeast citygates soared Monday, topping out at $9.00 in New England. That seemed natural, considering that the Northeast and Midwest were experiencing their worst siege of cold so far this winter, and chilly temperatures dominated most of the weather picture elsewhere.
Colder Weekend Weather Ignored as Most Prices Fall
Generally moderate softness dominated the weekend market. With pockets of modest gains tucked in here and there, a large majority of points ranged from flat to down about 15 cents Friday, although most of the losses were confined to single digits. However, San Juan Basin numbers stood out with a plunge of about 35 cents.