Mild

Mixed pricing returned to the cash marketplace Friday, but this time declines were in a lopsided majority. Forecasts of mild to cool weather throughout much of the U.S. and Canada and the typical weekend drop in industrial demand were the chief price depressants.

Falling futures prices, mild temperatures, declining demand and the slow return of shut-in Gulf production sent cash prices sharply lower on Wednesday. Some points were down more than 70 cents from Tuesday’s levels and most were down 50 cents or more.

With heat levels starting to ease off in the South and a mild warm-up trend approaching in the Midwest, the diminution of weather-related load was enough to allow prices to retreat across the board Wednesday. Negative prior-day guidance from the screen contributed to the softening effect.

Nearly all of the West was rebounding Monday from Friday’s major softness, but the market was considerably more mixed in the East. Bearishly mild mid-May temperatures prevailing in most areas and abundant storage levels were matched up against a small screen gain on the previous Friday and the return of industrial demand from a weekend reduction.

The first three Mondays in March consistently saw rebounds from weekend softness (although the gains were rather mild a couple of times and didn’t quite extend to all points in one case). The fourth time was the charm for cash market bears, though, as quotes Monday (March 28) extended the move lower that had been launched on the previous Wednesday and Thursday.

Following the old “buy the rumor, sell the event” trading mantra, natural gas futures tumbled lower Monday as sellers punished the market just as the coldest weather of the season was arriving in the eastern United States.

Gulf production shut-ins were mounting rapidly Tuesday but mild weather, more than adequate gas in storage and weak demand helped pushed gas prices lower at many locations outside the Gulf Coast region. Points in the Northeast were mixed with prices declines reaching as much as 15 cents at some points while there were small increases at others. Midcontinent, Western and Canadian prices fell 5-10 cents but Texas quotes were mixed.

Despite mild-temperature forecasts, the natural gas futures market rebounded Monday as traders bid prices higher on concerns over increased tropical activity in the Atlantic Ocean and Gulf of Mexico. At $5.70 the September contract gapped higher at the opening bell on its way to an early high at $5.75. The contract eased slightly in the late morning hours and then stabilized in quiet afternoon trading. September closed at $5.693, up 10.5 cents for the session.

After refusing to bow to weak weather fundamentals in the previous two days, prices practically did a curtsy for weather Friday with declines ranging from about a dime to a quarter. The softness was fairly homogenous across geographic areas, although Northeast citygates and several western points tended to garner most of the drops of 20 cents or more.