Usually

For bull traders yesterday’s natural gas futures session was acase of “no news is bad news” as prices chopped lower in a raresub-50,000 volume session. As usually is the case the promptmonth-September-took the biggest hit, slipping 4.5 cents to finishat an even $2.70.

Cash prices proved remarkably resistant Friday to the softnessthat usually accompanies lowered demand for a weekend period. TheGulf Coast and Northeast citygates were essentially flat, whilemost of the small declines were concentrated in the West andMidcontinent. Sources attributed the relatively firm pricing tomodest support from a slightly higher futures screen, along withtrader anticipation of a return to hotter weather morecharacteristic of June than last week’s below-normal thermometerreadings throughout much of the East.

Defying the conventional wisdom that lower gas demand over aweekend usually causes softer prices, cash prices put on a show ofstrength Friday with nearly all points rising by a nickel or more.An increase of less than a penny in the Henry Hub futures contractprovided little support for the cash market, so sources concludedit must have been the residual effect from Thursday’s screen run-upof nearly a dime that helped push up cash quotes Friday.

The drop in gas load that usually accompanies a weekendreduction of business activity failed to dampen the cash market’sbullishness Friday. Though a few points (El Paso-Permian andTrunkline-South Texas) eked out only penny upticks and CIG and Wahawere essentially flat, most markets achieved gains of 3-7 cents.Influencing factors were unchanged from earlier in the week,sources said: Western cold, Southern heat, a higher screen andelectric utilities using gas in peaking units while many nuclearand coal plants are down for refueling or other maintenance.

Major producers, who usually have chemical and other businessesto shield them somewhat from weak commodity prices, obviously wereleft unprotected during the third quarter. They’re suffering underlow oil and gas prices right along side the independents.

Where there’s new power generation these days, there usually isnatural gas. And Florida will add almost 11,000 MW of power overthe next eight years, according to a recent report by the state’sutilities. Power demand is soaring in the state, particularly inthe southwestern portion, where currently there are no gaspipelines. That’s going to change soon, however.

Usually when sources refer to “following the screen,” it meansfutures trading influencing cash prices up or down in the samedirection. Thursday it was a case of cash following the screennowhere. Lack of movement in Nymex’s September contract wasreplicated by general flatness for physical gas.