Bolstered primarily by fresh screen strength and also by hot weather in the Gulf Coast states and much of the West, the initial May aftermarket was launched Friday with across-the-board advances over end-of-May numbers. A few points were confined to single-digit gains, but the overall market’s upticks ranged from about a dime to 30 cents.

Because virtually all of Thursday’s deals had covered flow through the end of May, Friday’s trading was reported as Sunday-Monday only. A western utility buyer remarked, “I like that method of breaking up the weekend; otherwise I would have to do more trading on Friday.”

Although the South was again on the verge of getting into seasonal form as a major bastion of air conditioning demand, the Northeast and Midwest continue to enjoy mild to cool weather that is hardly suggestive of summer being right around the corner. “We’re expecting some load pickup in early June, but nothing really significant,” a Northeast utility buyer said. “At least that leaves us with plenty of leeway on storage injections.”

At this point it’s hard to say when hot weather will finally get to northern market areas, the buyer continued, especially since the National Weather Service predicts below normal temperatures for the eastern U.S. this week. “We’re still getting lows in the 50s, which is cooler than normal for this time of year, but not especially unusual. Our usual heavy air conditioning period typically begins around the end of June and runs through mid-September.”

Pipeline signals to the market were somewhat mixed in the East. Texas Eastern had already told shippers Thursday it was anticipating excess linepack levels over the weekend and was not accepting due-pipe imbalance make-ups as of Friday. Sonat joined in Friday with a caution that the possibility of a weekend OFO was unlikely Saturday but “too close to call” on long imbalances for Sunday and Monday. However, Florida Gas Transmission said warming Florida weather was depleting its linepack and might require an Overage Alert Day notice to be issued Saturday or Sunday (see Transportation Notes).

One Florida utility buyer saw FGT’s advisory as somewhat psychological, saying, “They just warned of an OAD to keep people from drafting their system on the last day of month.” Another of the state’s utility buyers was in general agreement about the pipeline “making noises again. It’s always a pain if they drop an OAD on us over the weekend. I’d probably have to come into the office to adjust nominations.”

Meanwhile on the other side of the country, San Juan/Rockies/Pacific Northwest prices continued to thrive on scorching heat dominating the region away from the coast. But while the PG&E citygate managed to rebound a little more than a dime despite the utility extending an OFO through at least Saturday (see Transportation Notes), Malin and the Southern California border recorded Friday’s smallest gains of about a nickel or less.

PG&E’s OFO was creating problems by backing up gas upstream that couldn’t get into the system, according to a marketer. “We may have to wait until Monday to sort things out,” she said. It seemed rather contradictory to the marketer that the California Independent System Operator could issue an electrical emergency alert Wednesday afternoon, suggesting that power generation demand for gas was very high in California, yet PG&E followed that event with two straight high-linepack OFOs. “But I don’t have any explanation for both the alert and the OFOs,” she added. Coastal California was staying mild, while all the heat was in the inland areas, she said.

Citigroup analyst Kyle Cooper said his initial estimation for this week’s storage report “looks for a build in excess of 110 Bcf.” That would compare with a year-ago injection of 107 Bcf and the five-year average of 85 Bcf. “To keep pace with a 116% injection rate of the five-year average required to reach 2,800 Bcf, a build of 99 Bcf or greater is required [for the week ending May 30],” Cooper continued.

“After a very slow start to the injection season due to the lingering cold in April, YTD [year to date] injections now stand at 108% of the five-year average. Considering the recent injections in relation to the regression model and current forecasts, multiple weeks of 100+ Bcf injections are considered likely. We do not expect nearly as many 100+ Bcf weeks as occurred in 2001, but three or four is highly probably. Obviously, actual temperatures will play a very key role.”

Not much bidweek business remained to be completed Friday. “On the whole trading was smooth,” a western buyer said. After doing a San Juan Basin deal in the mid $5.10s as bidweek began May 23, he found prices coming off considerably following the screen’s dive of nearly 22 cents Tuesday. “By the end I was trading it [San Juan] in the $4.90s,” he said.

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