Virtually all of the cash market was down Friday as modest rebounds of high temperatures and a prior-day 4-cent decline by October futures proved unable to support continued firmness. The usual weekend drop of industrial load applied further downward pressure on cash numbers.
Articles from Rebounds
Northeast citygates soaring by multi-dollar amounts were way out in front of price rebounds at nearly all points Friday. Winter storms were already under way in the Northeast and Midwest (to be followed by new ones during the weekend), a fresh storm was due Saturday in the already frigid Pacific Northwest, and the South could expect one more day of moderate conditions before a cold front brought a return of wintry weather Sunday.
Several retreating Northeast citygates failed to join rebounds from weekend weakness in the rest of the cash market Monday. In addition to prior-trading day support from Friday’s 16.4-cent rally by December futures and the return of industrial load from weekend hiatus, heating demand was picking up again in the Midwest and South after brief warming trends going into the weekend.
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.
The midweek buildup of heat in many sections of the U.S. and Eastern Canada was able to overcome further prior-day screen softness in spurring rebounds in most of the cash market Thursday. However, it’s highly unlikely that gains will continue Friday after a very bearish storage report led to a steep plunge in August natural gas amid another meltdown day in Nymex’s energy futures complex.
The cash market continued to rise at most points Tuesday, but except for big rebounds in the Rockies, the new gains were quite a bit smaller than Monday’s. A few locations even showed moderate losses. The invasion of cold Canadian air into the U.S remained the chief instigator of further price increases, while an easing of excess supply issues in the West was responsible for larger upticks than those of the overall market.
Indicating that Tuesday’s rebounds were something of a market aberration, prices reverted to falling at nearly all points Wednesday. The screen’s prior-day slide of 59.9 cents, the continued mildness of early January temperatures in most areas, and expectations of an unusually small storage withdrawal report were the primary influences in the renewed softening.
Fulfilling NGI sources’ predictions, the cash market was able to shrug off Tuesday’s significant softness and post rebounds at all points Wednesday (see Daily GPI, Aug. 10). Increasing power generation load in the Northeast more than offset cooling trends in the Midwest, and high temperatures continued to dominate the weather picture in the South and most of the West.
Tropical storms may have been the big news of the day, but large rebounds in the cash market Tuesday weren’t exactly small potatoes. Storm-related shut-ins (see related story) combined with high heat levels in a few areas and a stronger Friday screen to generate price increases that were as small as a little less than a quarter, but mostly were substantially larger.
The first three Mondays in March consistently saw rebounds from weekend softness (although the gains were rather mild a couple of times and didn’t quite extend to all points in one case). The fourth time was the charm for cash market bears, though, as quotes Monday (March 28) extended the move lower that had been launched on the previous Wednesday and Thursday.