Sizeable

With the eastern South poised to become the next target of relatively sizeable amounts of snow and more of it expected to return to the upper East Coast early next week, most of the cash market realized small gains Thursday.

Cash prices saw sizeable drops at all points Friday as last week’s burst of cold weather was abating in several regions. The previous day’s 33-cent loss by January futures also was a major factor in the pervasive softness, abetted to a small extent by the typical decline of industrial load over a weekend.

Flat or near-flat quotes were common in the East while much of the West was racking up some sizeable losses Thursday. Mixed price moves that had been mostly higher the day before became mostly lower as the cash market weighed the potential of Tropical Storm Fay causing offshore shut-ins and prior-day futures support against light cooling load in many areas.

The cash market rode the support of widespread cooling load and two prior trading days of rising futures to record sizeable increases at all points Monday except in the Rockies. The return of industrial demand from weekend hiatus also contributed to price strength.

Traders watched in awe Thursday morning as the sizeable year-over-year storage surplus, which stood at 400+ Bcf just four short weeks ago, switched to a 26 Bcf deficit following the Energy Information Administration’s (EIA) 224 Bcf withdrawal report for the week ended Feb. 2. Although trading a fairly tight range, March natural gas futures zig-zagged on Thursday, putting in a low of $7.710 and a high of $7.935 before settling at $7.871, up 16.2 cents from Wednesday.

With negative pressures continuing to bear down on the market, cash prices finally succumbed Friday by posting sizeable losses at all points. Cooling load would be growing even scarcer over the weekend, the screen had dropped more than a quarter the day before, bearish storage signals were surfacing again, and the industrial load decline over a weekend came into play.

Natural gas storage revisions, a sizeable injection and continued weakness in crude futures teamed up Thursday to pull the June natural gas futures contract lower in its first regular session as prompt month. June natural gas hit a low of $6.780 before settling at $6.805, down 46.6 cents on the day. The June contract has shed $1.605 over the last six sessions.

The March aftermarket began Tuesday pretty much the same as February’s daily market ended — with sizeable losses across the board. Prospects for any significant recovery in cash prices are dim, with relatively light heating load for the foreseeable future, natural gas futures continuing to fall to levels not seen in nearly a year and abundant amounts of gas in storage — much of which must be used or go into the general market within the next month or so.

With most of its strength concentrated in the Gulf Coast and Northeast, the cash market saw gains at a sizeable majority of points Wednesday but still had quite a few flat to lower numbers in the mix. Weather forecasts more apropos of mid-winter than before in the Northeast helped prompt the gains, aided by a modicum of support from Tuesday’s 10.8-cent screen gain.