Prices exited last week in much the same fashion they had spent the previous four days: falling at nearly all points, with a few scattered flat numbers thrown into the mix. Friday’s softness was anticipated because of generally weak cooling load outside the Southwest, a bearish storage report Thursday and the lack of any viable tropical storm threats to offshore production.
Losses were generally more moderate than those the day before, ranging from about 2 to nearly 20 cents. A majority of declines were around a dime or less. Tennessee in the Gulf Coast and Northeast citygates tended to show the greatest weakness.
A powerful cold front had much of the East experiencing temperatures well below normal for early August, subduing even the South’s famous summer heat. Some parts of the South, Mid-Atlantic and Northeast were capable of recording date-specific record lows over the weekend, The Weather Channel (TWC) said. Northeast lows may bottom out in the high 40s, it added. And as if to top such unusual conditions, TWC said new cold fronts are due to sweep into the Midwest and Northeast early this week.
Gas prices resisted falling much in the West by virtue of triple-digit highs continuing in the desert Southwest. But a Pacific Northwest source said daytime temperatures there were struggling to get above the 60s or 70s.
A low-pressure area about midway across the Atlantic was pressing on toward North America at about 15 mph and could become the season’s third tropical depression soon, TWC said. What was left of Tropical Depression Two was expected to cause heavy rains in the vicinity of Hispaniola, Jamaica and eastern Cuba, but little else.
A couple of traders reported a trend of rising prices during Friday morning’s session. Chicago followed the Henry Hub pattern upward, a marketer said, with the citygate starting in the low $5.40s and getting into the high $5.50s late. There must have been some storage injections going on, he remarked, because he sure didn’t see much weather-related demand in the Midwest. “We’ve got a pretty strong downtrend going in the cash market, and I think there’s still some more room to fall before we hit bottom,” he said in assessing the coming week’s market. He didn’t expect the new tropical wave in the Atlantic to amount to anything as far as raising gas prices.
An intrastate Texas trader said prices started out behaving like they would in a regular weekend downturn, but then came up a dime from where they started. He didn’t know where the demand was coming from, noting that the “storage play” rationale for unexpected price firmness has been hammered to death since May, but by now there isn’t much available space left available. Texas electric utilities weren’t buying much gas Friday now that a cold front has enveloped much of the state, he said. The trader said the screen might be able to rebound next week, but he didn’t care much for the odds of a cash rally.
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