Retreat

The trading week ended quietly Friday with Northeast citygates continuing to take long strides in retreat from the quadruple-digit heights they had seen early in the week and the rest of the cash market mixed but with bears firmly entrenched in the driver’s seat.

Several points in the Gulf Coast and Appalachia continued to move higher Thursday, but for the most part the cash market was in retreat as glimmers of a break in the frigid weather that has kept much of the U.S. and Canada in its icy grasp this week surfaced on the horizon.

After staging a retreat Thursday on the Energy Information Administration’s 5 Bcf injection report for the week ended Nov. 10, December natural gas futures rebounded Friday on reports of some colder weather coming into the U.S. After breaking above the psychological $8 level to put in a $8.250 high on the New York Mercantile Exchange (Nymex), the prompt month ended up settling at $8.179, up 42.4 cents on the day and 38.5 cents higher than the previous week’s close.

December natural gas futures ventured above the psychological $8 price level for a second consecutive session Friday only to retreat lower once again. As it has been for much of the week, price direction appeared to be a little bit in question on the day as the prompt month ended up closing at $7.884, up 7 cents on the day and a mere 5.7 cents above the previous week’s settle.

Buying for storage injections finally proved unable to offset the retreat of weather-related load Wednesday, and the result was falling cash prices across the board.

As sources had expected, the cash market succumbed to weak weather fundamentals and dwindling energy futures support Tuesday by staging a major retreat. Virtually all points saw double-digit declines ranging from about 15 cents to half a dollar or so

Prices were in retreat by mostly small amounts at nearly all points Wednesday despite heating load remaining fairly robust in several regions. One source felt that it was mainly a case of the market having wrung all the upside it could out of this week’s cold spells and having only minuscule next-day support from energy futures.

After breaking through the $6.84 top of its range in Tuesday trading, April natural gas futures on Wednesday showed no signs of retreat. The prompt month carved out a high of $6.973 in the overnight Nymex Access session and started Wednesday’s regular session trading at $6.95.

With a midweek winter blast due to yield to more moderate conditions in key northern market areas, prices dropped at nearly all points Thursday by amounts ranging from a couple of pennies to a little more than 30 cents. A little more than half of the declines were a dime or less.