Plunging

While Northeast citygates continued a rapid descent from last week’s stratospheric price levels, the rest of the market had several flat to higher points Monday but mostly saw moderate declines of up to a little more than 20 cents. The larger non-Northeast losses tended to cluster in the Midcontinent. Transco Station 45 was something of an anomaly with a 40-cent gain.

After plunging in Tuesday’s regular session and then again in overnight Access trade to a $6.425 bottom, November natural gas futures on Wednesday reversed course eventually settling up 21.5 cents at $6.851. The up-move corresponded with a similar rebound in crude oil futures, which fell $1.13 on Tuesday and then rallied Wednesday to gain exactly $1.13 back, settling at $53.64.

The cash market was predictably weaker Friday, with continuing triple-digit and quadruple-digit plunges at Northeast citygates leading the trek downward. Non-Northeast losses were as small as a nickel, but mostly ranged between 20 and 90 cents.

Unlike the previous week, there was no major rebound Monday from plunging prices going into the weekend. But new softness was capped at a quarter’s decline, and only a few points outside the Rockies and Northeast fell by 20 cents or more. A couple of scattered moderate gains were recorded, and most of the rest of the market ranged from flat to down 18 cents.

A source in Michigan may have anecdotally sized up the Friday market with an innocent comment: “It’s going to be a warm trick-or-treating night for us.” A warm Halloween in Michigan?!? That kind of unseasonable weather throughout much of the East and the southern reaches of the West went a long way toward explaining why weekend prices plunged across the board.

To absolutely no one’s surprise, all points recorded major declines in swing trading for the weekend. Friday’s market had a lot going against it: the screen plunge a day earlier that was linked to the latest record-setting storage injection; the disappearance of very hot weather almost everywhere except for the desert Southwest and inland California; and the normal industrial load drop that accompanies a weekend.

With prominently plunging exceptions such as Dominion, Niagara, some Northeast citygates and San Juan-Blanco, most of the cash market continued to drive higher Tuesday while residents of the Northeast and Mid-Atlantic began to dig out from under a Presidents Day blizzard that set snowfall records. Advances ranged from about a dime to about 30 cents, with most points measuring their gains in the 20s.

If prices hadn’t been so abnormally high to begin with, it might have been considered a market meltdown. As it was, prices registered steep declines Friday that reached triple digits in the Northeast and at several other points. Rockies, Pacific Northwest and California quotes tended to see the smallest losses of 30-50 cents; otherwise it was rare for any point to fall by less than 60 cents.

Cash prices continued to soften as expected Friday, but except for still-plunging Northeast citygates it was hardly the market “collapse” that more than one source had thought possible the day before. Outside the Northeast, nearly all the declines were between about a dime and 15 cents.