Plunges

A few dollar-plus plunges were recorded as prices took massive drops at virtually every point Friday (the thinly quoted Questar was a market aberration in falling less than a nickel). The cash market was beset on all sides by negative influences: warming trends eliminating much of the heating load that had developed earlier in the week; indications that the lack of storage options coupled with high linepack issues could be coming to a head; further prior-day futures weakness; and the drop of industrial load that is typical of a weekend.

An NGI source who had said Thursday he would not be surprised to see carnage in the cash market Friday was not, in fact, surprised as prices took a dive across the board. The plunges were especially severe in the West, where Northwest’s ongoing constraint limiting Rockies access to southbound transportation (see Daily GPI, Sept. 14) combined with high-linepack OFOs by California’s two big distributors (see Transportation Notes) and the bearish pressures felt by the entire market to produce dollar-plus drops at many points.

Cash prices finally faced up to the reality of weak fundamentals Friday with across the board plunges. Many points fell more than a dollar as moderate weather, brimming storage coffers, pipeline OFOs, prior-day screen softness and the usual weekend drop in industrial load ganged up on a market that had been mostly rising in the previous three days with little visible means of support.

In a tremendously weak beginning of the November aftermarket, triple-digit plunges — some exceeding $2 — permeated Monday’s quotes. Power generation loads were light as mild to cool temperatures prevailed in most areas, and last Friday’s screen dive of more than 60 cents added further downward pressure on cash quotes.

Cash market softness continued Tuesday as eastern weather moderates from the frigid holiday weekend conditions and western temperatures stay fairly benign except in several snowy mountain areas.

As sources had predicted Friday, a sharp rebound from huge weekend price plunges was in store for Monday. Sure enough, all points rallied Monday by amounts ranging from about 40 cents to more than $1.30, with nearly all of the gains of a dollar or more being recorded in the West.

As sources had predicted Friday, a sharp rebound from huge weekend price plunges was in store for Monday. Sure enough, all points rallied Monday by amounts ranging from about 40 cents to more than $1.30, with nearly all of the gains of a dollar or more being recorded in the West.

Another Friday, another price rout. In a seeming rerun from a week earlier, weekend prices tanked hard Friday in response to lack of weather-related load and a bearish storage report in which the 81 Bcf injection exceeded most prior expectations.

What some had expected to be moderate softness Friday turned into a general rout. Beset by generally light cooling load outside the southernmost U.S., recent screen weakness, a California OFO and the industrial load loss associated with a weekend, price drops ranged from a quarter to around half a dollar. The West took most of the heaviest losses.