Rally

What is expected to be a short-lived midweek return of colder temperatures in the Midwest and Rockies helped several points rally Tuesday from Monday’s overall softness. The cash market remained weak for the most part, however, as the continuation of a warming trend in the Northeast and largely static mild conditions in the South kept heating load minimal for mid-March.

Double-digit spikes at Northeast citygates led an overall price rally Monday as low temperatures around freezing or less were in the forecast for Tuesday in the Northeast, Midwest and some sections of the South and West. The return of industrial demand from its typical weekend decline was another mildly bullish factor in the market, while last Friday’s 7.2-cent drop by March futures apparently had limited impact.

After climbing nearly 35 cents on reduced trading volume Friday, traders added another dime to the February natural gas futures rally on Monday as winter storms and freezing temperatures were expected to engulf the eastern United States later in the week. The front-month contract ventured back above $6 to close at $6.072, a gain of 10.1 cents.

A solid majority of points achieved rebounds Monday from across the board weekend plunges. The overall rally was considered largely driven by the previous Friday’s 35.2-cent spike in December futures (along with a little help from industrial load returning from its typical weekend drop) because weather fundamentals were weak for the most part.

This week’s overall cash market rally was running out of steam for the most part Wednesday as mostly moderate weather and brimming storage facilities took their toll on the majority of prices. However, most western points were able to rise due to rising heat levels in the desert Southwest, chilly weather in the Rockies and Pacific Northwest and the easing of some excess supply/storage constraints.

With the exception of drops at several western points, a majority of the cash market extended Monday’s rally into Tuesday. Some heating load in northern market areas, a modicum of cooling demand from the South through Southern California and the previous day’s 15.3-cent rebound by November futures supported prices at most points.

Although some traders earlier in the week had seen a rally in the East as unlikely due to lack of weather demand, the market appeared to defy forecasts of continued moderate temperatures in most of the region Friday by rising at a majority of points Thursday. It reversed a pattern in effect through Wednesday in which minority gains were almost all in the Midcontinent and Rockies; on Thursday those areas, along with some other western points, saw most of the declines.

NorthernStar Natural Gas Friday delivered nearly 800 supporter postcards to Oregon Gov. Ted Kulongoski as part of a two-month campaign to rally labor organizations, families and small businesses in support of its plans to build a liquefied natural gas (LNG) receiving terminal at Bradwood Landing on the Oregon side of the Columbia River just east of where it meets the Pacific Ocean. A total of 1,460 cards have been collected during the past two months, the company said.

Western spikes led an overall rally by the cash market Monday as cooling load was ample in Eastern Canada and much of the U.S. The previous Thursday’s 18.8-cent gain by August futures and the return of industrial demand from a long holiday weekend absence were also bullish factors.