A marketer had correctly predicted Monday (see Daily GPI, April 7) that the screen softness that day would outweigh any remaining midweek heating load and drive Tuesday’s cash prices lower. But while he looked for mostly modest declines, a large majority of them were in double digits.
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Mixed Price Moves See Mostly Near-Flat Quotes
A large majority of the cash market saw little change in pricing Friday as prior-day screen support and forecasts of colder weather in some areas were largely counterbalanced by warming trends in other areas and the usual weekend decline of industrial demand.
Softness Dominant Again as GOM Recovery Begins
Most points kept falling Wednesday due to a prior-day screen plunge of 68.2 cents and unseasonably moderate weather continuing to prevail in many areas. Another bearish factor was the growing perception that Hurricane Gustav caused little significant damage to Gulf Coast infrastructure — either offshore or onshore — and restoration of shut-in Gulf of Mexico (GOM) production was under way and could be expected to ramp up fairly quickly.
Northeast Spikes Lead Rebounds at Most Points
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.
Heat Losses, Hub Restart Cause Overall Softness
Despite a mini-heat wave approaching in the Midwest and strong prior-day screen support, prices fell at all but three points Wednesday. Temperatures are remaining high in the southern tier of states but are due to retreat significantly Thursday in much of the Northeast and Rockies. The late-afternoon news of the Independence Hub restart Tuesday played a part in Wednesday’s softness because of the anticipated return of major supply volumes in the Gulf Coast, and a couple of sources suggested that the cash market retreated because prices had just become top-heavy from their own strength in recent weeks.
Prices Up; Columbia Gulf Suspends Receipts After Station Blast
The return of cold weather and prior-day screen support combined to keep prices rising at nearly all points Wednesday, but with the exception of the Northeast, the gains were considerably smaller than Tuesday’s in most cases. Production-area receipts into Columbia Gulf were suspended following a tornado-caused explosion Tuesday night at a Tennessee compressor station (see related story).
Many Eastern Points Quit Advance Temporarily
In spite of frigid weather remaining in place throughout much of the U.S. and Canada and prior-day screen support having returned the day before, prices were in retreat at most Gulf Coast, Midwest and Northeast points Tuesday. However, the Midcontinent and West continued to advance in nearly all cases, which was hardly surprising considering Wednesday lows are expected to range from the 20s and 30s to single digits in those regions.
Most Points Fall Despite Frigid Weekend in North
Weekend forecasts of snow and icy conditions in northern market areas stretching from the Rockies to the Northeast and substantive prior-day screen support were unable to keep most of the cash market from softening Friday. More moderate weather across the southern third of the U.S., a slight warming trend in the Northeast, traders eschewing spot gas purchases in favor of using storage and the usual weekend loss of industrial load were considered the chief factors in the declines.
Modest Rally at Most Points Unlikely to Last
Prices rallied by mostly small amounts at a majority of points Thursday, deriving support from the previous day’s 9.1-cent screen gain, a smidgen of heating load in the Rockies and areas near the Canadian border, and not much else. Moderate mid-October temperatures dominate much of the weather picture, and evidence continues to mount that storage injection capacity has grown very scarce.
Heat, Futures Strength Boost Most Cash Points
A screen spike of 36.6 cents a day earlier and ongoing heavy power generation load from high temperatures in the vicinity of 100 degrees across nearly all of the southern half of the U.S. trumped milder conditions in northern market areas and the usual decline of industrial load over a weekend in causing prices to keep rising at a sizable majority of points Friday.