Sources

Prices rose at all but one point Thursday in response to the previous day’s 31.9-cent spike in June natural gas futures. Sources said that other than continuing storage purchases, there was virtually nothing else than the residual screen strength on which to pin Thursday’s rally.

As a couple of sources had expected Friday, that day’s record-setting action in crude oil futures paved the way for a general cash gas rally Monday, even though the natural gas screen had fallen more than 8 cents going into the weekend. The return of industrial load from a weekend slump, moderately cooler weather in northern market areas to start the week and continued storage injection demand also played a part in Monday’s overall bullishness.

Tuesday’s futures gain of more than half a dollar proved to have more support for the cash market than a couple of sources had expected. Prices were up Wednesday at a majority of points, although nearly all of the rally was based in the East, where it got a little help from slight trends toward colder weather in the Midwest and Northeast market areas.

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.

Sources agreed that storage buying and the screen’s 40-cent-plus last-gasp rebound on Wednesday were behind rising cash numbers at most points Thursday. In two-day deals for flow through the end of December (Saturday), a few flat points were scattered among gains ranging from less than a nickel to nearly half a dollar.

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.

NGI sources generally were correct Thursday in predicting a moderate cash rally for Friday, but not entirely accurate. Prices fell at virtually all Northeast citygates Friday as a cold front took regional temperatures lower for the weekend, and at scattered points elsewhere. Otherwise quotes ranged from flat to as much as 20 cents higher.

Commissioner Joseph T. Kelliher is expected soon to be named chairman of the Federal Energy Regulatory Commission, sources have told NGI, replacing the current Chairman Pat Wood, whose term ends Thursday, June 30.

As sources had expected, the cash market succumbed to weak weather fundamentals and dwindling energy futures support Tuesday by staging a major retreat. Virtually all points saw double-digit declines ranging from about 15 cents to half a dollar or so