Losses

The United States has limited capability to help Mexico make up for gas supply losses after what were believed to be terrorist attacks caused huge explosions that could be felt 12 miles away early Monday on several natural gas pipelines and one crude oil line operated by the national oil company, Petroleos Mexicanos (Pemex).

In a sign that this week’s steep cash market slide is beginning to stabilize, most of Wednesday’s majority losses were only in single digits and a significant number of scattered points were flat to about a nickel higher. Moderate temperature increases were predicted for Thursday in the Northeast and some parts of the Midwest, although they weren’t expected to spur any large increases in overall heating load.

Building on Friday’s losses, August natural gas futures gapped 28.6 cents lower at the open Monday and continued to work downward, recording a new low for the move at $6.010 before closing at $6.039, down 40.7 cents on the day.

The July natural gas futures contract continued its descent Tuesday, dropping 17.1 cents to close at $7.519. While the day’s activity brought the week’s combined losses to 39.9 cents, some market participants were quick to note that the trading range of the last few months is still intact, adding that scaled-down buying is already evident.

Like any decent sports team, Spokane, WA-based Avista Corp. posted more wins than losses this month in the wake of selling its trading/marketing arm, Avista Energy, to Shell’s Coral Energy Holding LP. Nevertheless, on a preliminary basis, Avista Energy showed a loss of 14 cents/diluted share for the first quarter this year, compared to 10 cents/diluted share in profits for the same period last year, the parent company reported last Wednesday. The Avista utility unit also lost a state of Washington court fight over a proposed new electric transmission line.

The January aftermarket got off to a weak start with declines at a solid majority of points as bearish weather is expected to extend through at least mid-January. Losses ranged from a couple of pennies to about 45 cents.

The cash market rang up double-digit losses across the board Tuesday. Moderating weather trends in the South and West, fairly benign early-December conditions in the Northeast, and a 61.6-cent futures plunge the day before kept prices in free-fall.

The return of industrial load from weekend hiatus did little to stem price losses Monday in most of the cash market. Moderating weather in much of the East and screen weakness extending into its third day Monday dragged a majority of points between a little less than a dime and a half dollar lower.

While prompt-month natural gas staged a feeble rally Friday afternoon, the real news of the day was the 25-cent and greater losses across most winter contracts. October natural gas traded within a $4.810 to $5.070 range before settling the week at $4.982, up 9 cents on the day, but 69.3 cents lower than the previous Friday’s close.