Lack

With the official start of spring only three days away, lack of heating demand softens market.

With the official start of spring only three days away, lack of heating demand softens market.

Signifying moderate weather and lack of demand in the Golden State, Pacific Gas and Electric issued a systemwide Stage 2 high-inventory OFO on its California Gas Transmission system for Saturday. Penalties of $1/Dth were set for positive daily imbalances exceeding a 13% tolerance. Southern California Gas extended a high-linepack OFO that was implemented Friday through at least Saturday. SoCalGas had said it expected to have no more injection capacity in its storage fields as of Friday.

With a lack of significant cold around the country and expectations of a healthy storage injection report Thursday, December natural gas futures on Wednesday continued to probe lower price levels. The prompt-month contract reached a low of $4.719 before closing the regular session at $4.725, down 19.7 cents from Tuesday’s close.

Ample supplies of natural gas and the lack of any real demand allowed cash market points across the United States to sink on Tuesday as traders were unimpressed by the possibility of seeing the first tropical storm enter the Atlantic. While most points declined by less than a dime, some of the largest drops were seen in the Northeast, the Rockies and the West.

The cash market again bowed to a general lack of substantial cooling load and further prior-day futures softness in recording losses at all but one point Thursday. Modest warming trends in the Rockies and western Midwest were due to spur little additional power generation demand for gas.

Despite a lack of support from the screen’s Friday session, cash market points received a futures-related boost on Monday for Tuesday delivery. All points posted gains as July natural gas futures exploded higher.

The increasing lack of weather-based demand weighed even more heavily on the cash market Friday, with prices falling at a large majority of points. And unlike the single-digit changes that had prevailed through Thursday last week, most of Friday’s losses exceeded a dime. The previous day’s futures drop of 12.3 cents was an additional negative influence on cash quotes.

Guided by financial and commodity market weakness and the lack of any supportive news, May natural gas futures on Tuesday dropped to a new low for the down move before closing out the regular session at $3.562, down 17 cents from Monday’s finish. The last time a front-month contract settled lower was more than six-and-a-half years ago on Sept. 25, 2002.