Moderating

Although moderating temperatures are in the Wednesday forecast for the Midwest and Midcontinent, growing heating load in the South and Northeast along with a prior-day 14-cent increase by March futures were able to generate sizeable gains at all points but one Tuesday.

Spikes at Northeast citygates Tuesday didn’t get much company elsewhere in the firming category. Most points declined as moderating weather trends in the western half of the South, Midcontinent and Midwest limited overall heating load. The previous Friday’s 4.2-cent drop by February futures was another mildly negative factor for the cash market.

Prices dropped at nearly all points Tuesday as moderating weather trends were expected to continue in the South, Northeast, Rockies/Pacific Northwest and parts of the Midwest. A 4-cent decline by January futures a day earlier contributed a modest amount of bearishness to the cash market.

Cash prices fell at all points Friday, depressed by forecasts of cold weather moderating in some areas by the end of the weekend, a 42.7-cent plunge in December futures a day earlier and the usual weekend drop of industrial load.

Prices kept falling at a majority of points Thursday as traders saw moderating weather starting in several areas Friday through the weekend and storage use continued to keep a lid on new spot gas purchases. The previous day’s 4.9-cent drop by February futures was an additional, albeit minor, bearish influence.

Natural gas futures joined the rest of the energy complex’s slump on Tuesday over renewed U.S. economy recession fears and moderating temperatures. February natural gas shed 32.3 cents on Tuesday to close at $7.670.

Strong but moderating U.S. onshore natural gas growth lifted third quarter production 1.1% sequentially from the previous quarter and jumped output by 3.5% from the same period a year ago, according to a survey of 39 producers.

As expected, moderating weather trends in northern market areas and the decline of industrial load that occurs over a weekend caused cash prices to drop at nearly all points Friday. But the most recent string of mixed price movement was preserved by gains of up to about 30 cents in the Rockies, where highs in the mid 90s were predicted for Saturday in Denver, Salt Lake City and Cheyenne, WY.

Despite modest prior-day support from futures, the cash market was losing enough heating load to moderating weather trends in several areas to cause lower prices at most points Friday. The drop of industrial load that accompanies weekend flows also contributed to the overall softness.