Despite only the most marginal firming of weather fundamentals and a softer screen during the morning, nearly all cash points ranged from flat to about a dime higher Tuesday. Most softening was fairly negligible except for double-digit drops at Sumas, Stanfield, Malin and intra-Alberta, which were due largely to cool Pacific Northwest weather, a NOVA tolerance change Sunday to 0/-20% and a constraint on PG&E Gas Transmission-Northwest deliveries (see Transportation Notes).
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California Upticks Out of Step With Overall Declines
As many traders had expected, the moderation of cold weather ineastern markets and the screen’s expiration-day dive were enough todrive the late-March swing market sharply lower in nearly all casesThursday. Only new increases at the Southern California border andPG&E citygate defied the overall downtrend.
Bearish Cash Market Shows Little Sign of Reversing
Once again softening cash prices followed the lead of theprevious afternoon’s screen movement, and if that tendencycontinues to hold true, expect another falling cash market today.Wednesday’s declines ranged from about a nickel to 20 cents, andCalifornia stood out again with losses greater than those in thegeneral market.
Prices Dive Due to Warmer Forecasts, Screen Plunge
Weather remained cold Tuesday over most of the East, butpredictions of at least a moderate warming trend developing and ahuge plunge in futures were enough to spur the cash market to makea steep descent of its own. Dollar-plus declines were common.Transco Zone 6 (NYC) fell nearly 20 dollars, yet still reigned asthe costliest price point with an average of more than $18.
Weekend Brings Some Price Relief, But Not Much
A solid blast of cold, wintry weather and a technically bullishfutures screen produced tremendous price increases and enormousprice ranges nationwide last week. On Friday, there was little onthe horizon to change the current market picture other than thenormal weekend decline in demand.
Prices Dive in East; Heat Wave Buoys Most of West
Eastern points followed up on Monday’s screen drop of 15-pluscents and subsequent milder softening Tuesday by falling 15 centsor more themselves yesterday. However, the West’s continuing heatwave kept Malin and Rockies pipes generally flat while otherCalifornia points and San Juan Basin were down only a nickel or so.
Screen, Heat Unable to Avert Overall Softening
As expected, the cash market responded to what was considered amildly bearish storage report with mostly mild declines Thursday.Eastern points generally fell in the vicinity of a nickel exceptfor some Northeast citygate drops around a dime, while the Westranged from flat to down as much as a quarter (Stanfield).
Hot Screen and Weather Push Cash Market Higher
Those of a bullish bent found encouragement all around Tuesday:July natural gas futures challenged unprecedented heights whilecrude oil futures edged back above $32/bbl; heat waves challengedelectric grid operators in both the East and West; and priorestimates of this afternoon’s storage report indicated a consensusthat the year-on-year deficit will just keep growing and adding tothe refill challenge.
Prices Finally Find a Direction to Move, And It’s Up
After several successive days of stagnation, the cash marketfinally was able to use a little bit of screen support andexpectations of colder weather moving into major market areas toget out of its rut Tuesday. Prices ranged from flat in theSouthwest basins to more than a nickel higher at New Englandcitygates and for intra-Alberta and several related western points.Most quotes rose between 3 and 5 cents.
Forecasts Are the Difference as Cash and Futures Diverge
Even as cash prices plummeted 25 cents or more for weekenddeliveries the futures screen managed to push higher Friday astraders looked past the unseasonably warm weather outside theirwindows and focused instead on short and medium range forecasts.After a strong opening at $2.56 the December contract caught a waveof technical buying from both trade and local shorts, allowing itto peak at $2.71 before settling up 12.7 cents at $2.649.