Softer

Softer natural gas prices are eroding Canadian well numbers, but western drilling rigs are staying busy as the industry switches to targets requiring more work including deep supplies to bank for future use.

Softer natural gas prices are eroding Canadian well numbers, but western drilling rigs are staying busy as the industry switches to targets requiring more work including deep supplies to bank for future use.

Most of the cash market was softer Friday, but it had a few flat to moderately higher points in the mix. A prior-day screen increase and some instances of rising cooling load were outweighed by a significant weekend cooldown in the Northeast and the drop in industrial load that typically accompanies a weekend. Also, excess supply issues were accumulating in the West, where many of the largest losses were recorded.

Prices were mildly softer for the most part Friday, but rising heat levels in the South and the resultant increase in competition for Gulf Coast supplies had some points trading flat to a little more than 15 cents higher. However, only three of the gains exceeded a couple of pennies.

As on Friday, the cash market was mixed and mostly softer again Monday. However, with air conditioning load starting to rebuild gradually in the South and already being well established in the Southwest, Monday’s trading featured were more flat to moderately higher points in the mix than on Friday.

Many points were flat or close to it Thursday in a mixed cash market that leaned mostly to the upside. A majority of the slightly softer quotes were in the West, Midcontinent and Northeast.

Even with a fairly impressive amount of heating load remaining in play on the first official day of spring, the cash market was mostly softer as mixed pricing extended into a fourth straight trading day Monday.

The combination of softer crude oil prices and forecasts calling for moderating temperatures were enough to keep the bulls corralled Monday as the natural gas market eased from Friday’s 30-month highs. Monday’s price softness led September futures to a low of $9.38, but buyers stepped in and the contract closed for the day at $9.54, down 4.8 cents for the session.

Nearly all Midcontinent points joined the entire western market in seeing softer prices Friday, while most numbers were flat to higher in the Gulf Coast, Northeast and Midwest. Most of the East derived support from Thursday’s screen advance of 3 cents and a modicum of cooling load in the humid South. Prices in the West and Midcontinent were depressed by a lack of weather-related demand and a new California OFO.