Most points were a dime or less up or down from flat Tuesday as limited cooling load kept gas demand relatively light. However, moderately higher points clearly outnumbered declining ones. The Rockies market was conspicuous again with much larger losses that had pipes being quoted at less than $2.
Not counting Rockies plunges that ran as high as about 95 cents on CIG, price movement ranged from nearly 30 cents up to about 20 cents down. Flat numbers were common.
The West was starting to see issues of excess supply emerge again, although they were nowhere near as serious as last Friday when OFOs by both of California's big distributors combined with high-linepack problems on a few production-area pipes. This time it was only PG&E issuing a high-inventory OFO for Thursday, setting the imbalance tolerance at a relatively stringent 5% (see Transportation Notes). The OFO had virtually no impact on Malin and the PG&E citygate, both of which were flat.
Most western points outside the Rockies were flat to a bit higher. The big Rockies drops occurred as little local load (Denver could expect a high in the upper 70s Wednesday) combined with light demand to the west (PG&E OFO) and to the east (flat to slightly higher Midcontinent/Midwest quotes).
June weather is staying fairly moderate so far for the most part. Although Southern highs are reaching 90 degrees or a little more from Mississippi westward, it's considerably more moderate in the region's eastern end, where Atlanta and Charlotte, NC, are expected to peak in the low 80s Wednesday. The Midwest is chipping in some cooling load, with parts of Illinois and the lower Ohio Valley due to see the 90s Wednesday, according to The Weather Channel (TWC), while the desert Southwest is returning to mid-summer conditions with peak temperatures in the mid 100s.
But weather-based load is fairly low in other areas. Northeast temperatures will be near to somewhat below average, TWC said, and Boston is due to top out around 65 degrees Wednesday.
In light of benign weather demand in many areas, storage buying is probably the main source of the modest firmness in cash so far this week, one source suggested.
Wednesday's cash market will have modest prior-day screen support after July natural gas futures ignored weakness in the petroleum product trading pits at Nymex and rallied for a 7.4-cent gain Tuesday.
Local weather is "very nice," said a Midwestern marketer. She reported buying a package at the Consumers Energy citygate for $7.57, exactly the same price as on Monday. She confirmed that all of her company's current purchases are for "putting a little extra" into its clients' storage accounts.
A West Coast trader noted that in PG&E's case, high-inventory OFOs don't necessarily cause sizeable price drops at Malin and the PG&E citygate, as they usually did in the past. He agreed that with "great weather" along most of the West Coast, there was little of either heating or cooling load to be found.
The National Weather Service predicts above-normal temperatures during the June 18-22 workweek everywhere in New England except for Connecticut and western Massachusetts. It also expects above-normal readings everywhere west of a line running southward through eastern Montana and central Wyoming and along the western borders of Colorado and New Mexico. Below-normal temperatures are due in the middle third of the U.S. from the Canadian border to the Gulf Coast and Mexican border, the agency said.
Ron Denhardt of Strategic Energy & Economic Research looks for a 100 Bcf storage injection to be reported for the week ended June 8.
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