Screen

As expected, Friday turned out to be another day of “following the screen” as the cash market responded to the previous day’s 24.6-cent drop by August futures with declines at most points. Modest cooling trends in northern market areas and the loss of industrial load that accompanies a weekend contributed to the general cash bearishness.

A prior-day screen advance of less than a dime contended for primary influence on Wednesday’s cash market with generally moderate weather fundamentals and expectations that Thursday morning’s storage report will show that the industry returned to net injection mode last week. The results were mixed, with most points remaining close to flat and few straying more than about a dime up or down from Tuesday’s levels.

Forecasts of moderating weekend weather in much of the western two-thirds of the U.S. and a prior-day screen drop of nearly 20 cents combined to create double-digit price declines at all points Friday that generally were almost as large as Thursday’s run-ups. The slump of industrial load that accompanies a weekend was another bearish influence.

An expiration-day screen dive of more than 30 cents and light heating demand because of mild weather were chiefly responsible for falling prices across the board Thursday. Of course, the long-established conditions of a major storage surplus and the absence of a major hurricane threat to Gulf of Mexico production in a rapidly waning hurricane season also acted as a drag on the market.

The weather fundamentals didn’t seem to be there, and the screen had extended a three-day slide with a drop of 35.6 cents the day before (adding a loss of another nickel Wednesday). But a mixed cash market showed a moderate bias to the upside Wednesday.

Except for flat performances at Kingsgate and Texas Eastern M-2, weekend prices dropped at all points in Friday’s trading. Support from a strong screen Thursday and from very hot weather continuing across the South and in much of the West was unable to overcome the decline in power generation load in key northern market areas and the weekend’s typical loss in industrial demand.

Prices were mixed Wednesday, but lower again in most cases. A screen plunge of nearly 40 cents the day before clearly outweighed rising cooling load in some areas in vying to be the primary cash market influence. Continued concern about the potential for running out of storage injection space later this summer or fall also contributed to overall cash softness.

Feeling support from returning power generation load as summer-like heat began to reassert itself and also from a 17.5-cent screen gain on the previous Friday, cash prices rose at virtually all points Monday.

Except for one essentially flat point (Texas Eastern-East Texas), prices continued to fall across the board Thursday. The screen drop of nearly 30 cents the day before and burgeoning storage inventories again weighed on the cash market. However, prospects of rising heat levels in northern market areas likely were responsible for Thursday’s declines being considerably smaller than those on Wednesday.