Upticks

After two days of mostly small upticks to begin the week, it was time Wednesday for a large majority of small gains to be the market’s main feature. Winter may have officially begun Tuesday, but the new season wasn’t readily evident, judging from the generally mild forecasts for its second day in most of the eastern third of the U.S.

Price gains were virtually across the board Wednesday and were larger than the prior day’s mostly minuscule upticks. Cooling load is recovering in many areas from its slump during the first two-thirds of August, and Tuesday’s 10.4-cent increase by September futures was an additional bullish factor.

In a general reversal from the previous day, Northeast citygates plummeted Thursday while nearly all of the rest of the market recorded sizeable upticks. Heat levels were due to stay high from the desert Southwest through the Midcontinent and South into the Mid-Atlantic. And it wasn’t much, but a 1.6-cent futures increase a day earlier provided a wee bit of support.

Gains were still small, but a few points that had been flat a day earlier were beginning to record upticks of a couple of pennies or so Thursday. Cooling load was bolstered by continuing high temperatures throughout the South being joined by forecasts of huge peak temperature jumps in parts of the Midwest that were still relatively low as recently as Thursday.

Nearly all of the cash market again saw substantive upticks Tuesday, drawing support from a 22.5-cent spike by July futures a day earlier and a fairly large amount of cooling demand from hot weather across most of the southern half of the U.S. Although chances of storm development were being discounted, some traders may have considered a low-pressure area in the Atlantic Ocean as an additional bullish factor.

While some points were able to log increases for the entire week, deals done on Friday for weekend and Monday delivery included some upticks, some that did not change and quite a few that recorded declines. The Northeast, Midcontinent, Rockies and California recorded the most drops, with declines ranging from a penny to 6 cents.

The oil and natural gas industry last Wednesday generally welcomed the Obama administration’s proposed plan to open up the Mid-Atlantic and South Atlantic waters and parts of the eastern Gulf of Mexico (GOM) to expanded exploratory and development activities, saying it was a good start. But others, such as the U.S. Chamber of Commerce and American Solutions, noted the the proposed plan was far from a sure thing, with President Obama stressing that the offshore areas “will be considered potential areas for development.”

A small loss by intrastate OGT and flat quotes at several points averted a third straight day of across-the-board upticks Thursday. Cooling trends throughout most of the eastern United States easily outweighed mostly moderate conditions in much of the West in sustaining further gains at most points. A prior-day screen loss had little effect on general cash market firmness Thursday but may have more impact Friday.

Upticks by as much as about 70 cents at a few Rockies locations averted a clean sweep of declines in the cash market Friday. All other points recorded losses in bowing to the dearth of heating load in most areas. A dime-plus fall by January futures a day earlier and the usual weekend slump of industrial demand further weakened cash quotes.