Rally

Wednesday’s rally in the face of bearish weather demand proved to be a fluke as prices fell at all but one point Thursday in trading for the Good Friday/Easter holiday weekend. Prior-day futures softness and the extra loss of industrial load during a long holiday weekend also figured into the cash losses.

After showing early signs of a rally, the expiring April natural gas futures contract on Monday resumed the downtrend of the last few months, locking in a low of $3.820 before going off the board at $3.842, down 3 cents from Friday’s close. The May contract finished the day at $3.916, down 1.4 cents from Friday’s finish.

After showing early signs of a rally, the expiring April natural gas futures contract on Monday resumed the downtrend of the last few months, locking in a low of $3.820 before going off the board at $3.842, down 3 cents from Friday’s close. The May contract finished the day at $3.916, down 1.4 cents from Friday’s finish.

With a little extra backing from the previous Friday’s modest futures rally, cash prices found enough remaining heating load — often accompanied by winter storms — to range from flat to about 20 cents higher at a large majority of points Monday. However, nearly all of the gains were in single digits.

With a little extra backing from the previous Friday’s modest futures rally, cash prices found enough remaining heating load — often accompanied by winter storms — to range from flat to about 20 cents higher at a large majority of points Monday. However, nearly all of the gains were in single digits.

Although a couple of sources had been dubious a day earlier about cold weather forecasts for the holiday weekend being able to rally the cash market, the projected jump in heating load proved sufficient to boost prices at most points Thursday. After sinking by triple-digit amounts in the previous two days, Northeast citygates led the rebound with gains of a dollar or more at most locations as regional lows were expected to fall into the 20s again after a gradual warming trend.

The rally in natural gas futures Thursday morning was stunted after the Energy Information Administration (EIA) reported that another 20 Bcf was injected into underground storage for the week ending Nov. 13. Even though the December contract ended up recording a gain on the day, the bottom line for traders is that even more gas has been added to the already record storage situation.

Despite the generally moderate to merely cool weather predicted for many areas early this week, prices were able to rally by mostly small amounts Friday at a modest majority of points in trading for Sunday-Monday flows (due to the month-to-month transition Sunday). However, an eastward-moving cold front that brought blizzard-like conditions to the Rockies earlier last week was already cooling much of the Midwest and was due to bring lower temperatures to the Northeast and much of the South eventually.

The big, sustained rally in 2010 U.S. natural gas prices predicted by some on Wall Street likely will fizzle as soon as the uncompleted wells and shut-in supply flood back into the market, energy analysts said last week.