It was an easy call to predict lower prices for the low-demand Memorial Day weekend, so nobody got caught by surprise Friday when an across-the-board dive swept the market. No point fell less than 20 cents, and western declines tended to be significantly larger than that.

“This market is looking weaker than ever,” especially after June futures finished the week below $4, a Houston-based marketer commented. “We need some regular summer weather to turn things around, and that’s been in short supply lately except in the West. So far it’s just been too darn cool in the South for the region to contribute its normal ‘fair share’ of air conditioning load.”

Besides a downturn of just over 8 cents on the screen, several pipeline OFOs to guard against excess linepack (see Transportation Notes) also contributed to cash price depression. In addition to the pipes that did issue OFOs, several others had cautioned shippers about keeping receipt and delivery volumes matched up for the weekend. A Midcontinent trader said an OFO by Northern Natural Gas appeared to have little impact on pipeline prices, but he did see “pretty good buying for storage” behind NNG’s demarcation point.

In a further measure of markets then and now, Chicago deliveries fell below $4 Friday for the first time since Aug. 1, 2000 trading (for Aug. 2 flow) when they averaged $3.87. In the interim the citygate spiked above $10 several times during December and January.

For the third weekend in a row the PG&E citygate got “hammered,” as one trader termed it, by a high-linepack Stage 3 OFO declaration from the utility. All four California pricing points racked up triple-digit losses exceeding $2, as the inland heat wave that had plagued the state for much of the week was due to moderate over the weekend.

Because of the looming holiday weekend, it was a “quick morning” to one source. “Everybody wanted to get done [trading] and get gone, as soon as possible in the afternoon,” he said.

Bidweek business remained mostly in the talking stage, a couple of traders concurred. Not many people wanted to commit to June pricing until after the holiday, when they’ll have the Nymex expiry and fresh weather forecasts to work with, one said. He reported Chicago basis of plus 6.5-9.5 cents over the course of Thursday and Friday, saying it was about in the middle of that range Friday afternoon.

A marketer said he had been trading the PG&E citygate for June at $10.90-11.40 in the early part of last week, but was seeing it at $9.40-50 Friday. He expects June numbers to soften further this week “because of the huge gap between late-May and bidweek pricing.”

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