With a number of regions set to experience a warm-up this week and Friday’s futures action offering no real support, cash market points across the country on Monday mostly recorded drops in the neighborhood of 20 to 40 cents, with some eastern points declining by 60 cents or more.

Friday’s 2.7-cent gain in April natural gas futures did not offer much guidance to the cash market, but Monday’s screen action certainly will. After trading quietly Monday morning, April natural gas futures shot higher in the afternoon, recording a high of $10.040 before settling at $10.024, up 25.5 cents from Friday (see related story). April crude also surged higher Monday on supply concerns. The contract reached another record all-time high of $108/bbl before settling at an all-time record high settle of $107.90/bbl, up $2.75 from Friday.

The cash market couldn’t have been more different on the day. The Transco Zone 6 New York average led the declines on the day by shedding 89 cents to $10.45/MMBtu. The Henry Hub dropped 23 cents to average $9.59, while Northern Natural Ventura in the Midcontinent dropped a half dollar to average $9.39. In the Rockies, Cheyenne Hub declined 44 cents to average $8.52, and out West the Southern California Border Average dropped 21 cents to finish at $9.13.

“We saw a fairly liquid market from the North and the South, so we were able to trade pretty well,” said a West Coast gas marketer. “We noted that prices were down in the West and saw the selling coming in, so we were able to capture that.”

Looking at the weather picture, the trader said some coolness was expected to take hold later in the week but that the temperature change was not likely to push western market points higher. “I can’t see the weather supporting prices because it is not expected to be a huge drop in temperatures,” he said. “Now that could all change in an hour, but as for now there is no concern.”

While a little chill is expected out west, other regions of the country appear to be in for some temporary warmth. “Warm air will return to the Plains this week as high pressure moves off to the east,” said Kate Walters, a meteorologist with AccuWeather.com. “The warm, moist air from the Gulf of Mexico will flow northward behind the center of low pressure. As a result, the temperatures will surge to above-normal values by midweek. This will bring springlike weather into the forecast as far north as South Dakota. The temperatures will not last long for the northern Plains as another clipper system will move in later in the week, bringing cold temperatures back into the region.”

The forecasting service noted that the brief warm-up will be welcomed in the northern Plains and Upper Midwest, where temperatures this month have been below normal. AccuWeather.com noted that Chicago this month has averaged more than four degrees below normal, while centers in the East have been experiencing above-normal warmth. Both Philadelphia and Washington, DC, have averaged more than five degrees above normal, the weather service found.

©Copyright 2008Intelligence Press Inc. All rights reserved. The preceding news reportmay not be republished or redistributed, in whole or in part, in anyform, without prior written consent of Intelligence Press, Inc.