Given modest support by a small screen gain, most cash tradingpoints tended to level off Thursday instead of continuing a slidethat many had expected would last into the weekend. Northeastcitygates constituted the rare weaker market in the East with dropsof almost a nickel as the region cooled off further from a heatwave that set power generation load records early this week.
Articles from Points
A holding pattern developed Thursday at the majority of tradingpoints, which were flat to up or down a penny or two for an overallreading of flatness. The market was hardly a model of consistency,though, as price movement ranged from about two cents lower in theRockies to increases of about a nickel or more for the Appalachianpipes and Northeast citygates. High temperatures in the mid 80sThursday in the dry Northeast were a close match for those in therain-drenched South.
While the American Gas Association (AGA) report loomed at theend of Wednesday’s trading, moderate temperature forecasts and theeasing of New England and New York electricity jams were enough tocause drops of more than a nickel in the Northeast. The New Yorkcitygate ended the day in the mid $2.50s after ascending to the mid$2.70s on Monday.
Except for small upticks in San Juan Basin and related pointspartially due to an unexpected compressor station outage (seeTransportation Notes), the cash market again was mildly softerMonday. Much like last week, a screen decline of about a nickelprovided about the only influence meaningful to cash traders. Evensome cool weather returning to the Midwest failed to keep Chicagoand Michigan citygates from dropping 2-3 cents, while Midcontinentfield numbers were mostly flat.
Cash prices staged a broad-based retreat Monday, giving up 3-5cents at most Eastern points with Western declines tending to belarger at a nickel or more. The market lost some of last week’sfundamental support as a warming trend started to develop in theWest, sources said. In addition, although the Henry Hub futurescontract for May later reversed field and achieved an overall gainfor the day, its weakness in the morning rubbed off on cashtrading.
The mini-rallies reported at several points in Wednesday’s latecash trading apparently carried over into Thursday, resulting in aflat to slightly higher March swing market. A strong showing byHenry Hub futures on Nymex helped give cash a boost, sources said.In addition, there was enough chillier weather in the midwesternand northeastern market areas to have an impact on heating load.
The overall tone of the cash market remained flat Thursday, buta growing number of points were recording tiny decreases. Thetouches of softness came even as an eastbound cold front reachedthe nation’s midsection, reminding regions that had beenexperiencing record seasonal warmth recently that winter isn’tquite over yet. One source speculated that prices may be finallystarting to crack under the strain of having maintained theirpositions during a long period of no fundamentals support. Even thearrival of some for-real weather fundamentals may not be enough toprovide support, he said.
Most points fell between a nickel and a dime Monday, draggeddown by the anchor of a weaker Henry Hub futures contract, sourcessaid. A chilly West was most resistant to the general softeningwith prices that tended to be flat to off only a couple of cents.
The Energy Information Administration has lowered its wellheadprice forecast for the year by several percentage points but saidwellhead prices during the first quarter of 1999 should show a hugeincrease (28%) from average prices during this year’s warm firstquarter.