weather

Northwest began running a 96-hour test on the Snohomish (WA)Compressor Station’s Unit No. 1 Friday. The test, along with warmerweather and reduced weekend damand, did not allow Northwest toreceive the full 1,097,000 dekatherms of total supply at theSumas/Sipi throughput point. The pipeline capped Sumas/Sipi volumesat 1,000,000 dekatherms Sunday and raised that to 1,050,000dekatherms for Monday’s gas day. No constraint is scheduled todayas the work was expected to end Monday evening.

The natural gas cash market went through a second day of overallflatness Wednesday as most of the nation absorbed spring-liketemperatures on St. Patrick’s Day and calmness pervaded the futuresmarket.

As many traders had expected, prices were unable to sustain thestrong upward momentum with which they began the week. Even asblizzard conditions got worse Tuesday in several major marketareas, quotes for today’s gas flow were flat to as much as a nickellower. Apparently utilities and other end-users started leaningmuch more heavily on their storage accounts after Monday’s cashrun-up left many points trading well above first-of-month indexes,especially in Eastern markets, one source said.

With weather forecasts producing bearish news at every turn andnational storage reserves looming ever larger, Raymond James &ampAssociates recently published a report projecting spot wellhead gasprices will drop below the $1.50/Mcf level before the beginning ofsummer. The study, however, also warns of a gas “price shock” inearly 2000, when gas shortages run rampant and production is unableto keep up because of sharp declines in exploration and productionspending. It seems the industry is in store for a spot marketroller coaster ride.

The futures market gave the impression it was heading higheryesterday when February opened at Tuesday’s high and quickly tradedto $1.85. But the selling dried up, leaving the market vulnerableto light selling for the rest of the session. The February contractclosed down 5.1 cents for the day at $1.77.

Records for low temperatures were being set Tuesday from theMidwest into the Southeast, but it would have been difficult todiscern that from the broad-based retreat in cash prices. Tradersnoted a falling futures screen and factored in a warming trend thatwas expected to begin in the Midwest as early as Tuesday, then sentcash numbers down by a nickel or more at almost every point.

For the third day in a row Wednesday, natural gas futures werelower as traders continued to discount the arctic cold front andfocus on the larger fundamental picture. Even as a wintry mix ofprecipitation spread from Texas to Washington, D.C. yesterday,sources continued to point to the large storage overhang andforecasts calling for warming temperatures by early next week. Theprompt January contract finished 1.9 cents lower at $1.906.

Cash prices across the board Friday displayed softness for thesecond day in a row, reflecting a moderating weather forecast forthe weekend and further into this week. Despite a small late bounceback in some markets, prices in most areas finished the dayaveraging 1 to 10 cents less than Thursday’s levels.

The futures market was poised to trade higher yesterday onmomentum gained from a string of advances dating back to lastThursday, but revised forecasts calling for seasonable temperaturesand a lack of technical direction took the wind out of bull-tradersails, allowing the market to slip lower. For the second day in arow, changes were more pronounced in the December contract than theprompt month. November slid 2.2 cents lower to settle at $2.18, butDecember lost 2.8 cents to $2.455.