Weakness

The signs of growing cash market weakness that surfaced Tuesday were confirmed hugely Wednesday. Whereas only a moderate majority of points were slightly softer on the previous day, prices fell across the board Wednesday, with many of the losses reaching double digits.

Taking its cue from the mild screen weakness on Tuesday, the cash market strength of the last two days came to an end across the country on Wednesday except for a few spots in the Midcontinent and the West. The word on the street was that some shops closed early as traders flowed to Omaha, NE, for the culmination of the College World Series.

Led lower for much of Monday’s regular session by weakness in crude futures prices, June natural gas futures values rebounded in the afternoon following a rally in the June crude contract. Front-month natural gas ended up closing Monday at $4.302, down less than a penny on the day, while prompt-month crude finished the session at $58.50/bbl, down a mere 13 cents.

Prices sank as low as about 35 cents into Northwest-South of Green River and to less than a dollar at a few other Rockies points as weakness returned to a majority of the cash market Monday. Seasonal springtime weather, with its lack of either heating load or cooling load to any significant degree, was chiefly responsible. The previous Friday’s drop of 2 cents by May futures was an additional bearish element.

The cash market was showing more signs of weakness Wednesday as the latest blast of arctic cold was forecast to be receding in some regions. Many points in the Midcontinent and West that had been rising Tuesday were falling Wednesday by substantial amounts, and in many cases the remaining gains were considerably smaller than on the day before.

January natural gas futures fell in erratic, choppy trading Monday as analysts see continued weakness stemming from ample supplies and fickle cold weather. The January contract fell 17.6 cents to $5.566 and February lost 15.5 cents to $5.612. January crude oil rose $2.90 to $43.71/bbl.

Dismissing the dominant weakness in natural gas futures late last week in favor of a prevalent chill entering the eastern half of the United States this week, natural gas cash points on Monday were higher across the board, with more than a few dollar-plus gains seen in the Northeast, Midcontinent, Rockies and West.

Rebounding from last week’s late surge of weakness, December natural gas futures tied on 49.1 cents Monday to close at $7.248 as near-term forecasts began to tilt toward the chilly side. Crude futures increased as well — albeit by a smaller percentage — as the December contract gained $1.37 to finish at $62.41/bbl.

Aided by prior-day futures weakness, cash points on Thursday continued the week’s trend of back and forth by recording drops across the country. While most regions saw decreases of 20 to 45 cents, some eastern delivery points dropped on Thursday by over 60 cents.