Weakness

The physical market weakened about 3 cents on average overall Thursday with modest gains posted in the Northeast and more prevalent weakness shown at eastern, Midwest and California points.

The cash market Wednesday was on average less than a penny lower than Tuesday with noted strength seen at Northeast points and weakness reported in the Midcontinent and Midwest. At the close of futures trading the September contract had eased 3.1 cents to $2.933 and October was 2.1 cents lower at $2.961. September crude oil fell 32 cents to $93.35/bbl.

The cash market took a breather from bidweek activities and managed to trade less than a penny higher overall Wednesday. Weakness at Midwest points was made up by some strength in New England and eastern points as hot, humid weather was forecast for the next three days. At the close of futures trading September had eased 3.8 cents to $3.171 and October fell 4.1 cents to $3.171 as well. September crude oil added 85 cents to $88.91/bbl.

Fitch Ratings in a report last week said continued weakness in natural gas prices may spell trouble for many U.S. independent electricity generators.

Natural gas liquids (NGL) prices have been under pressure for a while, but some might be caught off guard by continuing weakness in the NGL sector, cautioned analysts at Wells Fargo Securities in a note Tuesday.

Cash markets tumbled about a dime on average Thursday as weakness in eastern basis markets leaked into next-day trading, and traders noted reduced power demand. A weak futures open and a bearish storage report also added a soft tone to the day’s trading.

With only a few exceptions all points rose Thursday with eastern points registering the strongest gains and weakness limited to a few points in the West.

Physical natural gas values fell at a majority of points on Monday as early weakness in the futures added a soft tone to the market and the market forces of minimal supportive weather and ample if not burdensome storage prevailed.

Next-day gas prices continued to erode Thursday except for in the Northeast, where a handful of points picked up between 10 to 20 cents. Weakness was widespread but was most pronounced at Wyoming points and locations eastward into the Midcontinent. Increases in the Northeast were only partially able to offset the general decline. Futures bears were pleased with the 10:30 a.m. EST storage report, which showed a withdrawal somewhat less than expectations.