Heed

March natural gas futures slid lower Thursday as traders focused on near-term warmth and paid little heed to a government inventory report showing the second largest withdrawal from gas inventories of the season. By the end of the session March was 5.3 cents lower at $3.868 and April fell 6.0 cents to $3.901. March crude oil rose $1.37 to $86.36/bbl.

Futures traders essentially ignored the formation of Tropical Storm Alex, and the cash market also paid it little heed as prices were little changed from flat Monday. Lower numbers constituted a slight majority, especially in the Midcontinent, Rockies and Western Canada.

The cash market appeared to be taking more heed of a well established fact Thursday: with its end less than two weeks away, this has been a rather mild spring with little in the way of weather-based demand for natural gas. What had been generally small gains at most points on Wednesday reversed into small losses in a majority of the market Thursday.

The cash market paid little heed Wednesday to a winter storm moving into the Southeast and bringing snow to areas that rarely ever see the white stuff. Instead, it concentrated on the futures declines of Monday and yesterday, and the increasing switch to using storage in lieu of buying new supplies, in sending prices down by double-digit amounts at nearly all points.