Mild

Prices continued to exhibit mild firmness Thursday, and sourceswere able to point out several contributing factors: a risingscreen, colder weather than expected both in western Canada andpushing southward into the central U.S., and Wednesday afternoon’sbullish storage report.

Even with continuing mild weather and an indifferent screen, theEast joined the West in a united front of rising prices Wednesday.Gains were fairly uniform across the board, ranging from about anickel to a dime. CIG, which had been lagging considerably behindother Rockies pipes Tuesday, was playing catch-up Wednesday with anincrease of a little more than a dime after an eastward-moving coldfront blanketed much of the state of Colorado in snow.

Mild weather and a weak futures screen combined to drop cashprices early for the second straight trading session yesterday. Butunlike last Friday, there was no late rally in the futures screento spark an afternoon rebound. The Northeast and Midcontinentexperienced the most significant drops, with many points in the tworegions falling more than a dime. Some western points avoided thegeneral weakness, with PG&E climbing almost a dime and theSoCal Border and Opal rising a few cents.

With the futures screen “crashing and burning,” as a producerdescribed it, November bidweek numbers also took a tumble Thursday.However, because much of the futures plunge occurred after swingtrading for today’s flow had been completed, incremental pricesgenerally were down only a nickel or so.

Gas buyers could have been forgiven Monday for modifying apopular movie’s catchphrase and screaming, “Show me the weather!” Autility buyer reporting “beautiful” conditions outdoors in theNortheast said it seemed odd that prices could continue to rise inthe face of moderate weather in most major market areas outside theSouth. Cash quotes ranged from flat to barely higher at Northeastcitygates to as much as 15 cents up at the PG&E citygate. Mostgains tended to be on either side of a nickel.

Cash prices proved remarkably resistant Friday to the softnessthat usually accompanies lowered demand for a weekend period. TheGulf Coast and Northeast citygates were essentially flat, whilemost of the small declines were concentrated in the West andMidcontinent. Sources attributed the relatively firm pricing tomodest support from a slightly higher futures screen, along withtrader anticipation of a return to hotter weather morecharacteristic of June than last week’s below-normal thermometerreadings throughout much of the East.

Except for small upticks in San Juan Basin and related pointspartially due to an unexpected compressor station outage (seeTransportation Notes), the cash market again was mildly softerMonday. Much like last week, a screen decline of about a nickelprovided about the only influence meaningful to cash traders. Evensome cool weather returning to the Midwest failed to keep Chicagoand Michigan citygates from dropping 2-3 cents, while Midcontinentfield numbers were mostly flat.

It didn’t surprise any traders when the cash market was theteensiest bit softer Wednesday. What did prompt some expressions ofamazement was that prices held up as strongly as they did. Betweena falling futures screen and overall weaker demand fundamentals, itseemed that prices should have dropped at least a nickel or more,one source said. Instead, few points were down more than a coupleof pennies, and some registered flat showings. Northern NaturalGas, serving a market area with near-winter-like chill, evenmanaged small gains.

The mini-rallies reported at several points in Wednesday’s latecash trading apparently carried over into Thursday, resulting in aflat to slightly higher March swing market. A strong showing byHenry Hub futures on Nymex helped give cash a boost, sources said.In addition, there was enough chillier weather in the midwesternand northeastern market areas to have an impact on heating load.