Northeast citygates continued to plummet Monday, but the rest of the cash market turned in a mixed performance that saw gains at most western points along with several in the Midcontinent. The Gulf Coast recorded price movement in both directions that leaned mostly to the downside, while Midwest deliveries were solidly lower.

Besides a few scattered flat numbers, most of Monday’s market in the East consisted of losses ranging from a couple of pennies to a little more than 60 cents. As on Friday, New England citygates tended to see the largest declines. However, the East also saw several gains in the Midcontinent and Texas that ran as high as about 15 cents. The West, where winter storms continue to dominate the climate, had prices rise from about a nickel to more than 30 cents at nearly every point.

Despite the western storminess, only the Far West could expect below normal temperatures Tuesday, while they would be above normal over and east of the Rockies, according to The Weather Channel. The Northeast and Upper Midwest will continue to see freezing lows, but it was believed that surging storage withdrawals are largely offsetting any need for new production to handle heating loads. Although chilly temperatures are due in the eastern reaches of the South, the rest of the region will remain generally spring-like.

The intrastate Texas market likely is seeing more demand from mild air conditioning use than it is for heating, one source said.

Market bulls who see little else to support their case currently may find some solace in a report by a consultant who sees a $6 floor for gas prices unless spring and summer weather is exceptionally mild. Stephen Smith of Stephen Smith & Associates says the current relationship of natural gas to residual fuel oil confers such a substantial cost advantage on gas that the return of industrial demand from alternative fuels is a virtual certainty (see related story).

A trader who sells gas on behalf of several Gulf Coast independent producers said Monday was a “very quiet” trading day. She noted that some markets to which she had been selling through last week said they were pulling from storage instead for Tuesday; under their storage contracts they have to use a certain amount by the end of March, she said. Still, the trader reported having no trouble placing her clients’ gas Monday, even though she was unable to detect any substantive heating load anywhere. “It’s still pretty chilly in the Northeast, but nothing out of the ordinary for early March,” she said.

Gas is a good buy for storage right now for those who have the injection space available, the trader continued. The trouble is, there’s not too many people in that fortunate situation, she said. She expects most prices to keep going down Tuesday, noting that the screen recorded a loss of nearly a quarter Monday amid overall energy futures weakness and that temperatures are fairly mild across the southern half of the U.S.

A Calgary-based producer concurred that the market Monday was “pretty boring,” saying he had seen flat to slightly higher numbers at Pacific Northwest and Western Canada points. The Calgary area is “having a little warm spell” early this week with afternoon highs around 50 degrees F, but it will be getting back below freezing by Thursday night, he said. Current price economics dictate that his company keep sending as much of its production east as possible. However, Alliance was reducing AOS (Authorized Overrun Service), so its volume was down for Tuesday, the producer said. Thus he kept a little more gas than usual in British Columbia and sent the rest directly into NOVA.

©Copyright 2006Intelligence 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.