Upward

Cash prices started out Tuesday playing catch-up with the Nymexscreen’s late increases on Monday, but wound up either flat or withsmall gains after futures reversed field. Only supply-constrainedSumas managed an increase of more than about 4 cents, and numberswere down a few cents on some Rockies pipes and at NorthernCalifornia market points.

If pipeline and LDC rates continue their upward climb, the”inevitable result” will be a sharp decline in producers’ wellheadrevenues and a subsequent “significant loss” of natural gassupplies, an official of a major producer group said Monday.

The tiny futures increase Monday seemed insignificant but mighthave been a harbinger of a much stronger rise Tuesday that carriedcash up with it. As has often been the case in the past, sourcesdragged out the old refrain of “following the screen” to explain…why cash was rising. Most points west of Waha were flat to only acouple of cents higher, and Rockies prices even fell a bit, butother markets tended to see upticks of 4-9 cents. Activity wasdecidedly more intense following what many people had considered a”boring market” Monday.

Just when it appeared the May Nymex contract was in a positionto resume its upward ways, the contract duped hopeful bullishtraders by falling 4.2 cents to $2.479 Thursday. Perhaps moreimportant than the magnitude of the loss is that May failed to moveabove resistance at $2.56, and that the contract spent time belowits significant $2.465 level for a time Thursday before recoveringduring its final half hour of trading.