Moderating

With temperatures moderating throughout the Midwest and most of the East, March natural gas futures explored lower price levels for a majority of Tuesday’s regular trading session. However, thanks to a late round of buying, the prompt month pushed higher to close at the day’s high of $7.585, up 8.2 cents from Friday’s close.

Prices fell at most points Friday — by dollar-plus amounts at several locations in the Northeast and Gulf Coast — as moderating weather trends were expected to begin over the weekend in several areas and be firmly entrenched by the start of this week. The extra loss of industrial load associated with a long holiday weekend was an additional negative influence for the cash market.

It’s still pretty cold in most places, especially the shivering Northeast, but there was enough of a moderating trend under way in such areas as the western South, Midcontinent/Midwest and Southwest that prices fell at nearly all points Thursday. The 17.6-cent decline in February futures the day before also contributed negative guidance to cash numbers.

The cash market rang up double-digit losses across the board Tuesday. Moderating weather trends in the South and West, fairly benign early-December conditions in the Northeast, and a 61.6-cent futures plunge the day before kept prices in free-fall.

Most market areas were still feeling the sting of winter chill Monday, but forecasts for moderating weather trends this week took prices lower at all points. Cash quotes also were depressed by last Friday’s 42.2-cent dive in January futures.

After tracking lower in Sunday’s overnight Globex trading session on news that some weather forecasts were calling for moderating temperatures next week, Nymex January natural gas futures maintained the downward price momentum throughout Monday’s regular session. Just two sessions after the prompt month reached a $9.050 high, the very same contract on Monday reached a low of $7.780 before closing at $7.806, down 61.6 cents from Friday’s close.

Yielding to moderating weather forecasts, a 16-cent near-month drop the day before and suspicions that the upcoming storage report (to be released around noon EDT Wednesday due to the holiday) could reveal another small injection, the cash market fell in most cases Tuesday. Only a few western points that were between flat and about a nickel higher averted a clean sweep of softness.

The return of industrial load from weekend hiatus did little to stem price losses Monday in most of the cash market. Moderating weather in much of the East and screen weakness extending into its third day Monday dragged a majority of points between a little less than a dime and a half dollar lower.

Forecasts of moderating weekend weather in much of the western two-thirds of the U.S. and a prior-day screen drop of nearly 20 cents combined to create double-digit price declines at all points Friday that generally were almost as large as Thursday’s run-ups. The slump of industrial load that accompanies a weekend was another bearish influence.