Following four days of impressive strength, cash prices finally succumbed Friday to dwindling weather-based load, a prior-day screen decline of 12.8 cents and the usual decline of industrial demand associated with a weekend. Large declines across the board ranged from about 20 cents to a little more than 60 cents.

The softness was distributed somewhat evenly across geographic markets, but the West tended to be a little weaker than most as supply increases combined with fading cold weather in the Pacific Northwest. Kern River said its linepack was back to normal systemwide Friday, a day after reporting low linepack in the three farthest downstream segments.

Although May natural gas futures fell another 8.3 cents Friday, sources thought crude oil’s setting the record price bar even higher would set the stage for a cash gas rebound Monday. May gas was already trading back over $8 on an online trading platform Friday afternoon after finishing the regular session at $7.981, a marketer reported. The usual reasons — geopolitical supply tensions concerning Iran, Nigeria, Venezuela and other nations, along with concern about relatively meager U.S. gasoline inventories with the summer driving season (not to mention hurricane season) just around the corner — were cited as reasons for June crude oil spiking nearly $1.50 to $75.17/bbl, the first $75-plus daily settlement for a prompt-month contract.

As expected, severe thunderstorms were quenching a significant amount of the South’s previous cooling load Friday, although the remaining heat prompted Florida Gas Transmission to keep an Overage Alert Day that had started Tuesday in place through at least Friday, and Southern Natural Gas said the possibility of a weekend OFO for long imbalances was “too close to call” (see Transportation Notes).

The Northeast was predicted to feel a bit chillier during the weekend, but no substantive increase in heating load was likely. Similarly, cold fronts due in the Midwest/Plains and Rockies/Pacific Northwest over the weekend were not expected to spur any spike in gas burning. However, a Calgary-based producer said overnight snow was in his city’s forecast Friday.

Northern Natural Gas noted that due to last year’s hurricanes in the Gulf of Mexico, much of the required equipment (boats, divers, repair materials, etc.) are not readily available for its efforts to restore flows at three platforms on the Northern-operated Matagorda Offshore Pipeline System (see Daily GPI, April 11). Northern said it is “doing everything possible to locate the necessary equipment and expedite repairs,” but no return-to-service date for the three platforms is available at this time.

Storage remains a big concern for many traders. A Northeast utility buyer said his available storage facilities are relatively full already compared to previous years. His company is getting along on April baseload and not buying any day-to-day gas because it has little room left for more injections. The company is trying to fill its accounts ratably over the summer, he said, “but we’re ahead of schedule right now.”

A Canadian producer noted that although TransCanada has been warning of potential Alberta Eastern Gate restrictions for many weeks now due to maintenance on various compressor stations, it has not yet actually implemented any such restrictions. He thought that was likely due to not as much Alberta gas going to Chicago as usual in recent weeks. He counted himself among those expecting cash gas prices to rally Monday based largely on oil’s strength.

With bidweek imminent, the producer said he was seeing NOVA Inventory Transfer trade Friday at basis of minus US$1.50 for May.

A Houston-based marketer agreed with expectations of firmer Monday pricing, and he also was gearing up for May business. He reported hearing Chicago citygate basis at minus 56 cents Friday. He also said he was seeing a lot of people offering released pipeline capacity for May that usually don’t do that, which indicated some weakness in the May market to him.

The marketer described dealing with Nicor restrictions at the citygate as a “real pain in the [rear end],” saying deliveries into the Nicor system were running a premium of 25-30 cents over those for NIPSCO and Peoples. Despite the concerns about rapidly refilling storage, the marketer said he doesn’t see any storage-caused price crash this summer. “Last year the question was whether we could get all the gas into the ground that we needed,” he said. “There’s no doubt at all this time.”

A marketer in the Upper Midwest said she was “enjoying this weather in the mid 70s” and doesn’t expect any return of severe cold before next fall. Her company was glad to see prices coming down Friday, but was wondering why they didn’t also fall Thursday. She hasn’t been buying any gas lately “because we didn’t like the price, and our customers appreciate that.”

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