Moderation

There was still a pretty large amount of heating load remaining Monday, but the relative overall moderation from last week allowed prices to plunge by large amounts at all points. Northeast citygates, which had constituted the only stronger market area Friday, led the descent with multi-dollar dives; Transco’s two Zone 6 pools fell by about $6 or a little less.

Because trading was for Monday-only deliveries, when most of the U.S. and Canada could anticipate a return of colder weather after some moderation during the holiday weekend, prices were up at most points Wednesday. The timing also allowed the cash market to ignore a 44.1-cent plunge by January futures a day earlier.

Most points continued to rise Tuesday as frigid weather extended its reach into some areas, although moderation was forecast in some parts of the South for Wednesday. An across the board run of firmness was averted by flat to about 15 cents lower numbers in several scattered instances.

While second quarter results were essentially flat when excluding nonrecurring items, the continuing moderation of growth in Nevada and Arizona challenges Las Vegas, NV-based Southwest Gas Corp. to fine tune its strategy for maximizing its regulatory climate and gaining rate changes that minimize weather and seasonal impacts on its rates. Southwest reported a loss of $337,000, or 1 cent/share, for the second quarter Monday, compared with profits of $3.7 million, or 9 cents/share for the same period last year.

It’s still pretty cold in most market areas and temperatures are headed lower again Friday in the Midwest, but some moderation from the ice storm that descended on much of the U.S. earlier in the week, combined with Wednesday’s 40.4-cent dive by February futures and growing use of storage in lieu of new purchases of spot gas, allowed cash prices to continue their descent at all points Thursday.

Looking ahead to a repeat of last week’s moderation of cold weather after midweek but acknowledging that for now heating load remains fairly robust, the cash market turned in a mixed performance Tuesday. If not for the screen’s 42-cent gain Monday, softening might have been more pervasive than it actually was Tuesday, one source said.

It’s still fairly cold in most markets early this week outside the southern tier of states, but some moderation of temperatures was in evidence as most points ranged from flat to down as much as 80 cents Monday. However, a fresh blast of cold air moving southward from Canada allowed Northeast citygates and some points in the Gulf Coast to continue the upward price trek they had launched in the last three trading days of last week.

Losses of a dollar or more were common in the cash market Thursday as forecasts for some moderation of cold weather in northern market areas and Wednesday’s screen decline of just under 30 cents caused all points to plunge Thursday. A bearish storage report and further futures weakness are expected to extend cash market weakness into the weekend.

Predictably, prices were down Wednesday due to a screen drop of 18.2 cents the day before and the ongoing moderation of weather from unusually chilly conditions for early May.