Lows

With Tuesday lows forecast to be in the 30s or less in most of the U.S. and Canada, prices rose strongly across the board Monday. Only California, parts of the desert Southwest and some locations in the South were expected to not go below the 40s. The previous Wednesday’s 7.3-cent advance by December futures (abetted by a further 15-cent uptick in the lightly traded Friday session) and the return of industrial load from its decline over the long holiday weekend provided further support for Monday’s cash market.

With freezing overnight lows having settled themselves into the Midwest and Northeast at least temporarily and even some Southern cities dipping into the 30s, most points were able to rebound Monday from the previous Friday’s across the board losses.

Beset by yet another transportation setback — this one unplanned — several Rockies points saw lows of 1, 2 or 3 cents Monday while Cheyenne Hub averaged less than a nickel and CIG was only a couple of pennies higher. All Rockies numbers plunged anywhere from a little less than half a dollar to nearly a dollar. However, the rest of the cash market was flat or stronger based on rising temperatures in the Midwest, Friday’s quarter rise by October futures and the return of industrial load from weekend hiatus.

As a couple of sources had predicted the day before, the cash market remained close to unchanged Thursday in most cases. Freezing lows forecast for Friday morning in much of the East, even into the Deep South, were augmented by Wednesday’s screen rebound in being responsible for modest gains at a majority of points.

Coming off of Tuesday’s 13.1-cent climb, April natural gas futures got back to the downward trend Wednesday as it plumbed new lows for the move. After carving out a new low at $6.450 in morning trade, the prompt month rebounded in the afternoon to settle at $6.648, down 3 cents on the day.

Citing forecasts of single-digit system weighted temperatures and below-zero lows at most reporting stations in its market area, Northern Natural Gas issued a System Overrun Limitation that will take effect Thursday for all market-area zones (ABC, D and E/F). It set System Management Services percentages (imbalance tolerances) of 25% for all zones.

With natural gas futures prices reaching six month lows last week, energy analysis firms are having to reassess their 2006 price estimates to account for the unseasonably warm weather streak that much of the U.S. has experienced this winter-to-date. Analysts at Raymond James said Monday that they were lowering their natural gas forecasts for the first half of 2006 due to “highly unfavorable weather.”

Natural gas futures reached new three-week lows Thursday morning on the surprising news that 188 Bcf was pulled from underground storage last week, well below consensus estimates focused on a 200-230 Bcf draw. The March contract was dealt the biggest blow by the news, dropping 22.7 cents for the session to finish at $6.149.

Breaking a five-session series of lower-lows and lower-highs, the natural gas futures market turned tentatively higher Wednesday as continued and steady end-user buying was enough to meet fund and commercial selling. Modest gains were seen throughout the six-year strip at Nymex and the September contract eked out a 0.9-cent advance to close Wednesday at $5.382.