Softness

Prices were flat to up a little more than 20 cents in most of the cash market Tuesday. The mild softness tended to congregate at Louisiana, Alabama/Mississippi and Northeast points. One source said storage buying must still be in vogue, because the physical market had support neither from a prior-day screen drop nor from weather that remains fairly mild outside a hot southern half of Texas and desert Southwest.

A modestly higher Gulf Coast point prevented a clean sweep of continuing price softness Thursday. A lack of weather-related demand, the additional loss of industrial load associated with a long holiday weekend and prior-day screen weakness combined to send prices lower at all other points.

The cash market saw mixed pricing for the third straight day Friday. Call it a tie.

Softness lingered at some points, but most of the cash market was flat to as much as a quarter higher Friday. The overall rally from Thursday’s big declines was spurred by the market’s anticipation of the first significant heating load in more than a month showing up over the weekend.

All points conformed Friday with sources’ expectations of softness for the initial January aftermarket, but for quite a few of them — especially in the East — it was hardly a case of getting “hammered,” as one producer had predicted. Though most points experienced double-digit retreats, a few indices held their own Friday with losses of only a nickel to 7 cents.

Prices rallied at all points Wednesday from the prior day’s overall softness as widespread heating load reasserted itself as the driver of an upward-looking market. Forecasts of virtually no let-up in frigid temperatures, along with Wednesday’s screen advance of 21.1 cents, portend further cash gains Thursday.

Showing that significant screen weakness on the previous day is not an automatic harbinger of subsequent softness in cash numbers, prices ranged from flat to as much as 65 cents higher at nearly all points Tuesday despite a natural gas futures loss of nearly a quarter on Monday. A few Gulf Coast points softened by as much as a dime in exceptions to the overall market strength.

Fulfilling NGI sources’ predictions, the cash market was able to shrug off Tuesday’s significant softness and post rebounds at all points Wednesday (see Daily GPI, Aug. 10). Increasing power generation load in the Northeast more than offset cooling trends in the Midwest, and high temperatures continued to dominate the weather picture in the South and most of the West.

There were a few gains in cash prices Friday, primarily in the growing-hotter Northeast, but they were strongly outweighed by softness in the rest of the market. The West was uniformly lower by double-digit amounts as excess supplies, OFOs and a general cooling trend weighed on regional pricing.