Pattern

The May aftermarket began at price levels considerably below first-of-month indexes in nearly all cases, and several traders advised against anyone holding their breath while awaiting an upturn of any significance. They cited a screen plunge Monday that was about twice as large as any of last week’s single-day drops, a general near-term weather outlook that remains on the benign side, and expectations of another big storage injection report (Lehman Brothers is projecting 70 Bcf).

The market went into a holding pattern for the most partThursday with a mix of moderate increases and decreases that wasweighted slightly to the downside. A big screen runup after mostcash business was completed had several traders expecting that cashwould take that development as a cue to avoid weekend softnesstoday.

Last week’s yo-yo market pattern continued into the weekend asprices reversed direction once again Friday, falling between 15 and50 cents at nearly all points. California remained the contrarymarket with larger declines at the border and Malin and the day’srare uptick at the PG&E citygate.

Realizing that bulls had spent all their bullets, bears hadtheir way at Nymex for the second-straight session Wednesday asthey took prices lower in several selling waves. Not even amid-morning rally could dissuade traders from continuing to takeprofits following the market’s precipitous spike to $9.65 earlierin the week. As a result, the January contract was left to slumplower for much of the afternoon, finishing 60.8 cents lower at$7.537.

Not all the action in Canadian natural gas fits the pattern thathas raised concerns over supplies for the next couple of heatingseasons -low-cost prairie drilling for quick hits of small reservesthat deplete rapidly.

With the U.S. Senate in a holding pattern until after the election, a rumored recess appointment by the White House to extend Chairman James J. Hoecker’s tour-of-duty at FERC by another year also has been drawn into the no-fly zone, awaiting Tuesday’s election results.

Repeating what has become a familiar pattern in recent years,California’s legislature has begun the process of turning back thedecision made last week by state energy regulators to allow thestate’s major investor-owned utilities to purchase electricitythrough exchanges other than the state-chartered nonprofitCalifornia Power Exchange (Cal-PX). Legislative action could comeas early as today as part of California’s annual budget bill.

Friday trading completed a pattern of last week’s cash market,substantially mimicking the price movement during the precedingweek: strong at first, leveling off and then softening aroundmidweek, and capped off by a mild rebound for most weekend numbers.

Sorry to sound like a broken record, but Thursday’s marketcontinued the pattern set Tuesday and Wednesday: ever-higher pricepeaks in the frigid Northeast (the top quote was $19 at TranscoZone 6-NYC) and considerably smaller but still strong increaseselsewhere.