Softening

Most points recorded single-digit declines Wednesday, with a few others falling by up to nearly 20 cents. A clean sweep of softening was averted by a few scattered points that ranged from flat to a little more than a dime higher.

Although most of the cash market remained in softening mode Thursday by recording losses ranging from a couple of pennies to more than 80 cents, several areas had points in the mix that were flat to as much as nearly a quarter higher. Sources suggested that the scattered rebounds and eventual screen strength were tied to growing perceptions that Hurricane Katrina-related Gulf of Mexico (GOM) shut-ins could rival those of 2004’s Hurricane Ivan for longevity.

Several flat to modestly higher numbers were tucked into the cash market here and there Monday, but softening still reigned at a substantial majority of points. Mild to above normal temperatures were due to continue Tuesday in most of the South, Midwest and lower West, but the Northeast and Pacific Northwest could expect to feel early-spring chills.

It was no surprise that nearly all points were in rebound mode Monday from weekend softening. But it was somewhat surprising that unlike last week, when Northeast citygates tended to lead price climbs higher and also the subsequent retreats, it was western points (Rockies/Pacific Northwest, Western Canada, California and the Southwest basins) which were in the driver’s seat for this new burst of cash bullishness.

A generally quiet market week came to a close Friday with anticipated softening at virtually all points (a flat Westcoast Station 2 was the exception). The lack of significant heating load in all market areas, the previous day’s bearish storage report and its accompanying screen loss of 22.7 cents, all played a part, with the usual weekend reduction in industrial load in a minor role.

Northeast losses of up to half a dollar led overall softening in the cash market Thursday as the scraps of heating load that had given mild support to prices at midweek continued to recede. Declines outside the Northeast were generally modest, with most in single digits and some points hanging in there with flat performances.

Despite indications that severe cold might linger in the Northeast and become more entrenched in the Midwest, prices continued to fall throughout most of the cash market Thursday. But several points — mostly in the Rockies — were flat to up slightly, and Westcoast Station 2 managed a gain of nearly C20 cents despite the pipeline’s imbalance tolerances continuing to encourage maximum drafting.

The cash market obviously was harking back to the previous afternoon’s screen strength, rather than paying attention to such trivial matters as weakening weather fundamentals, in recording even larger advances Tuesday than it had Monday.

The cash market obviously was harking back to the previous afternoon’s screen strength, rather than paying attention to such trivial matters as weakening weather fundamentals, in recording even larger advances Tuesday than it had Monday.