Residual

The market found enough cooling load building in the southern tier of U.S. states and enough residual cold weather in northern market areas and the western half of Canada to post increases at all but two points Thursday. There were also indications of strong storage buying, and the 17.4-cent advance by May futures Wednesday gave an extra boost to Thursday’s cash prices.

With forecasts of warming trends slow in being realized, the market found enough residual heating load to turn in a mixed performance Wednesday in which there were more gains than losses. Most points were flat or close to it, and those more than a dime higher or lower were few.

January-ending prices used a slight trend toward colder weather in northern market areas and residual support from Friday’s expiration-day gain of 17.1 cents by the January futures contract to rise at nearly all points Monday.

Rising temperatures throughout most of the U.S. and Eastern Canada combined with the residual support of natural gas futures that extended gains into a fifth straight day to produce large cash upticks across the board Monday. The continuing erosion of this year’s storage surplus, as evidenced in a below-expectations injection report last Thursday that is quite likely to be repeated this week, may also have contributed to the overall bullish mood.

Losing both a bit of air conditioning load and residual futures support, prices saw double-digit declines that ranged as high as half a dollar at a majority of points Tuesday. The West, where a heat wave has come on strongly in a region that had experienced mostly cool to moderate temperatures prior to this week, and the still-torrid Midcontinent cornered the market on points that were flat to less than a dime lower.

Despite starting to lose heating load again, the cash market relied on residual support from Friday’s 16.3-cent screen gain and strong demand from power generators to rack up increases in double digits at all points Monday. As usual, the post-weekend restoration of industrial load also was a factor.

Coasting a bit on the residual effects of the previous day’s futures run-up and continuing to experience heating load from the Northeast through the Midwest and Upper Plains, cash prices saw gains at most points in Tuesday’s strong launch of the October aftermarket.

As NGI sources had predicted, residual support from Thursday’s screen gain of nearly 16 cents (along with spikes in the rest of the energy futures complex) proved sufficient to outweigh weekend losses of cooling load in the Northeast and Midwest. The result was upticks ranging from about 3 cents to almost 15 cents in most of Friday’s cash market, although flat to moderately lower numbers were recorded at several Northeast citygates and western points.

Despite turning downward again Friday, the screen’s uptick of nearly 15 cents the day before had a residual supportive effect for Friday’s cash prices in eastern and Permian/Waha markets. They ranged from flat at a couple of Northeast points to 15 cents or so higher (Gulf South was a rare softer point in Louisiana), with most gains between a nickel and a dime. Most western points declined by various amounts ranging from small to huge.