Softened

Futures continued to work lower Tuesday as weather forecasts softened and funds and managed accounts squared their books. Traders see a fall below $4 as virtually inevitable and expect continued weakness. At the close March futures fell 6.4 cents to $4.040 and April dropped 6.8 cents to $4.072. March crude oil shed 54 cents to $86.94/bbl.

The cash market shrugged off what normally would have been a bullish development — hurricane-related offshore shut-ins — and softened in Wednesday’s trading for the first day of July. Quotes were down anywhere from a little less than a nickel to about 30 cents.

Prices were unable to sustain the upward momentum of Monday’s spikes for the most part and softened at most points Tuesday. Although temperatures were due to continue dropping Wednesday in the Northeast, moderate warming trends will be under way in the Midwest and South. Also, intermediate-term weather forecasts appeared to be less bullish Tuesday than they had been Monday.

Although cold weather was due to extend into the weekend in the Northeast and Midwest, its price-boosting ability was largely gone Friday. Quotes softened at most points as a warming trend began in the South and the West was fairly moderate for the most part.

There were exceptions to the rule in both regions Monday, but for the most part prices increased in the West and softened in the East. The western market was seeing a resurgence of cooling load in the desert Southwest (Phoenix is expected to be just under 100 degrees Tuesday), while its eastern counterpart continued to labor under the same negative influences that had caused major declines in the previous week.

Prices softened averted across the board in Thursday’s cash market. Negative influences were largely unchanged: widespread moderate weather, futures weakness, nearly full storage and the lack of a hurricane threat to offshore production with the end of the peak period (August-September) in Atlantic hurricane seasons rapidly approaching.

Prices softened as expected Wednesday in response to partialabatement of the heat wave that plagued the Northeast and MiddleAtlantic earlier this week. But based on the sharp spike in futuresfollowing the afternoon release of AGA’s storage report, sourcesshowed no hesitation in saying they expect cash to return to anupward direction today.

Overall prices for the weekend softened in Friday’s trading, butsome sizeable rebounds were occurring towards mid-morning as cashfollowed the screen back up after having previously followed itlower, several traders said.

Cash prices softened a bit Tuesday in mostly featureless tradingas major markets in the Midwest and Northeast cooled off. Themajority of points saw prices ranging from flat to down about anickel with no single region standing out as especially strong orweak. About the only exception to that general rule wasintra-Alberta, which started off around Monday’s C$2.04-05 averagebut quickly ramped up to near the top end of Monday’s range andwound up gaining about a nickel overall, a marketer reported. Forwhatever reason provincial field receipts have been lower thanexpected this week, she said, although only a few plants are stillundergoing annual turnaround maintenance.