weather

Bulls have not had much to smile about in the last five monthsat the New York Mercantile Exchange, so it was to their surpriseand delight when a trio of factors — storage, technicals, andanother possible tropical storm — combined to lift the marketThursday. The three remaining months in 1998 all received an almostequal boost with October edging out the others slightly byadvancing 6 cents to settle at $1.712 in moderate trading activity.

Given mild weather, bearish storage levels and the normal slumpin weekend demand, many traders were surprised Friday to see nearlyall Eastern points stay flat or go up as much as 3-4 cents. ThoughGulf Coast numbers were “falling hard” near deadline after startingseveral cents higher, a producer surmised they were being held upat first by “hurricane hype.” Other sources also mentioned that asthe reason for the relative Eastern strength, saying they couldthink of no other explanation.

Hot weather appeared to be the primary driver of gas pricesMonday. When you’ve got it, as regions from the Rockies westwarddid, quotes went up by about a nickel at many points; when youdon’t have it, as the relatively balmy Midwest and Northeast marketareas didn’t, prices were flat to down as much as 7 cents.

The usual slump in weekend demand and moderating weather hadcash prices softening Friday, but for the most part losses weresurprisingly small considering how weak the market had seemed inthe face of record-setting heat waves earlier in the week. The onlyreally big declines hitting double digits occurred at opposite endsof the U.S.: Transco Zone 6 citygates in the Northeast, andCalifornia and San Juan Basin numbers in the Southwest.

The futures market received an early boost from hot weatherspreading up the East coast and a strong over-the-counter marketMonday morning, but the buying ebbed sending Nymex spiraling lowerthroughout the day. “We shot up to $2.20 in a hurry, but the marketcould offer no follow-through above that level. At that point itwas a where-do-we-go-from-here mentality and the answer to thatquestion was down,” an analyst said. That left the August contractoff 7 cents to $2.095.

The July Nymex futures contract crept up another 2.9 cents tosettle Tuesday at $2.391, as hot weather and subsequent strong cashmarket prices continued to support the futures strip. July reacheda high of $2.41 on the day, which is just 2 cents shy of its nextresistance level. However, one source feels the spot month may havetrouble breaking that level in regular trading today since heexpects many traders to stay on the sidelines in anticipation ofthe latest AGA storage report, to be released this evening.

The screen was hot and the weather was hotter almost everywhereexcept on the West Coast. Put them together and you get Mondaytrading dominated by double-digit price increases at all pointsexcept the Rockies and Canadian markets.

Gas prices didn’t care that Monday marked the official start of1998’s Atlantic hurricane season. What did impress them wasblistering heat in the Gulf Coast producing states of Louisiana andTexas. With more gas than usual being kept at home for airconditioning load, the Midwest and Northeast market areas-thoughconsiderably cooler than Down South-had to pony up a few extracents in competition. The futures screen run-up contributed to thegeneral cash bullishness, sources said.

Cash prices slipped lower in most areas yesterday, giving backweather-driven gains earlier in the week. Sources blamed theweakness mainly on the inability of the June futures contract tomuster considerable gains, along with forecasts of moderatingtemperatures going into the weekend. With the exception of minorgains in Sumas and Stanfield, most trading areas lost between 3-5cents Tuesday.