Moderate

The cash market appeared to be entering a holding stage Wednesday as moderate upticks earlier in the week yielded to a mix of flat, slightly higher and slightly lower pricing that tended to be dominated by mild gains. The slowdown in price movement largely was attributed to cool-downs in the Northeast and Midwest market areas, reducing the air conditioning load that had supported the previous advances.

Assuming that weather conditions stay consistent with the 1970-1999 average, and oil prices continue to moderate, Energy and Environmental Analysis Inc. (EEA) expects natural gas prices at the Henry Hub for July to average $3.28/MMBtu, and $3.07/MMBtu for the remainder of the 2001 gas storage injection season. The research firm said it expects working gas in storage to reach 3.2 Tcf by the start of the winter heating season, higher than the 3.03 Tcf in 1999 and 2.66 Tcf in 2000.

Summertime, and the living is downright hot–finally. Moderate to severe heat was uniform in all areas for a change Monday (even up into Canada, where a Calgary source reported afternoon temperatures in the mid 80s). The cash market responded with across-the-board gains that were mostly in the teens.

Except for moderate declines at Northern California points, the market remained bullish for cash traders Tuesday. Rising heat levels in much of the East, Midcontinent/Midwest and Southwest combined with another morning of stronger futures to push cash higher by double digits at nearly all points, sources said.

Weekend price drops were large in the West but fairly moderate at eastern and Permian/Waha points. Declines were in double digits Friday in the Rockies/San Juan/Pacific Northwest and in triple digits at all California points except Malin (which was nearly a dollar lower) as a West Coast heat wave receded and PG&E issued another OFO (see Transportation Notes). But in the East quotes tended to range from flat to down about a dime, and scattered points registered tiny gains.

Taking a middle of the road approach, the board of directors at the New York Independent System Operator (NYISO) last Tuesday issued a request to market participants to work to develop what the board called a “balanced sanctions” proposal related to market power abuse by the middle of next month.

Taking a middle of the road approach, the board of directors at the New York Independent System Operator (NYISO) yesterday issued a request to market participants to work to develop what the board called a “balanced sanctions” proposal related to market power abuse by the middle of next month.

As expected after the big injection volume in AGA’s weekly storage report and the Nymex downturn in reaction, cash prices resumed softening Thursday at all points. But outside of California declines ranging from nearly a quarter (border-SoCalGas) to a little more than a dollar (Malin), other markets fell generally between a nickel and 15 cents with only a few scattered points exceeding 15 cents.

The fading late-April swing market continued on a path of moderate softness Thursday. Except for plunges at some California points, where temperatures are cooling again after a flash of summer-like heat earlier in the week, other markets ranged from flat to down about 15 cents. A majority of declines were between a nickel and a dime.