Hardly

Despite the warmer weather in key consuming regions and the recent drop in wholesale prices, the Energy Information Administration is still projecting that consumers will pay substantially more this winter for their heating needs than they did last winter. In fact, expected increases in winter expenditures for natural gas-heated households were raised slightly to 10% compared to projections in last month’s outlook.

Despite the warmer weather in key consuming regions and the recent drop in wholesale prices, the Energy Information Administration is still projecting that consumers will pay substantially more this winter for their heating needs than they did last winter. In fact, expected increases in winter expenditures for natural gas-heated households were raised slightly to 10% compared to projections in last month’s outlook.

In a stunningly well-mannered reaction, considering what the market sometimes does after receiving fresh fundamental news, natural gas futures dipped slightly lower Thursday morning as traders learned that a larger-than-expected 68 Bcf was added to underground storage facilities last week. By 11:20 a.m. EDT the June contract had carved out its low for the session, leaving the prompt month to shuffle sideways within an extremely tight 5-cent range for the rest of the day. June settled at $3.438, down 2.1 cents from Wednesday’s close.

Cash prices continued to soften as expected Friday, but except for still-plunging Northeast citygates it was hardly the market “collapse” that more than one source had thought possible the day before. Outside the Northeast, nearly all the declines were between about a dime and 15 cents.

With fundamental influences remaining weak and a falling screen to boot, it was hardly surprising Monday when cash prices failed for the most part to rebound from their weekend softness. Movement ranged from essentially flat to down a dime or so at nearly all eastern, California and Permian Basin points. The weakness was more pronounced in the Rockies/Pacific Northwest and San Juan Basin markets, where declines ranged from about a dime to 20 cents.

Prices continued to fall almost across the board Friday, which was hardly surprising because a pattern of weak weather fundamentals remained in place, June futures dropped more than a nickel in their prompt-month debut, and gas demand typically goes down over a weekend period.

The Democrats hardly mentioned the word “energy” in theirplatform at the August convention, but President Clinton last weektried to make up for that omission by ordering the release of 30million barrels of crude oil from the Strategic Petroleum Reserve(SPR), as well as a record $400 million of funding for energyassistance to low-income households for this winter.

The cash market fell across the board Friday but was hardly amodel of consistency. Declines ranged from barely 2-3 cents atscattered points to more than 20 cents at a few western points;most were between a nickel and about a dime. Activity was describedas quiet.

Holiday weekend prices fell as expected throughout most of thecash market Wednesday, but it was hardly the meltdown that sometraders had thought possible late in the previous week. Except forthe Southwest basins and California, few points fell by any morethan a dime, and most of the Gulf Coast, Midcontinent and Rockiesdeclines were about a nickel or less.