It was a tale of two markets Tuesday as cash prices were content to trade within about a two-cent range on either side of unchanged and futures traders covered short positions at the end of the session.

On average, cash prices were a couple of pennies lower with Northeast locations showing some relative firmness and western points weak. In a bit of a deja vu moment, June futures matched the 5.7-cent gain it had Monday on Tuesday to close at $2.393. July gas was up by 5.3 cents to $2.475, while June crude oil continued its slide, losing 93 cents to $97.01/bbl.

In the Northeast traders noted a general lack of buying interest. "There's no load and the power guys are off," said a New England marketer.

The marketer said daily prices would be solidly impacted by what weather forecasts looked like in major metropolitan areas such as Boston and said, "It's just that time of year. There's not much going on." Looking forward, he said he expected the Algonquin basis to Nymex to hold steady, and "the higher Nymex is the stronger the basis. That's how it usually runs."

Forecaster Wunderground.com said the high in Boston Tuesday of 59 would rise to 63 by Wednesday. The normal high in Boston this time of year is 64. The National Weather Service (NWS) in southeast Massachusetts said "low pressure over the eastern Great Lakes will swing a warm front through New England tonight [Tuesday]. This will draw warmer air across the region and bring showers and widely scattered thunderstorms. The low will then swing a cold front across the region later Wednesday and Thursday...keeping the weather wet during this period. Slow improvement is expected by the end of the week."

Next-day prices on Algonquin and Iroquois Waddington were flat and Tennessee Gas Pipelines Zone 4 200L fell a couple of pennies. Other eastern points fared worse. Quotes on Texas Eastern M-3 as well as deliveries to Transco Zone 6 NY each dropped nearly a nickel.

A Midcontinent trader cited the same uninspired weather conditions. "We have no weather here," said an Oklahoma trader. "It's a situation that you can open the windows and enjoy the weather, and there is no load."

Deliveries on Panhandle Eastern and NGPL Midcontinent both eased a few pennies, while gas delivered to Oklahoma Gas Transmission fell nearly a nickel.

Western gas prices were weak and may get weaker should forecasts of Pacific Northwest hydro supplies be realized.

"The hydroelectric situation has improved and continues to improve with the wet March and April we had," said Portland General Electric (PGE) CEO Jim Piro last Wednesday when reporting decreased quarter-over-quarter net income for 1Q2012 due mostly to the below-normal hydro conditions the first two months of the year. "The interesting thing is we didn't see much hydro in the first quarter because it was so cold. That means the snowpack is still up in the mountains and it hasn't come down, so we expect to see more of an effect from hydro in the second and third quarters" (see Daily GPI, May 8).

Deliveries to PG&E Citygate were off more than a nickel and gas at Malin dropped by 4 cents. Opal and Stanfield were each off by close to a nickel.

The futures market elected to head the other way as traders waited until the last minute to cover short positions. "We rallied 14 cents in the last 20 minutes. It was almost like the old days," said a New York floor trader. "If we come in at these levels tomorrow [Wednesday] and don't trade below $2.39 to $2.395, I think we could trade up another 10 to 20 cents on more short-covering. It looks like the market spooked a few people and could spook some more in the next day or two."

Weak loads may prevail for at least the next week as the NWS forecasts below-normal heating and cooling load for major eastern and Midwest energy markets. For the week ended May 12, NWS predicts New England will warm to just 56 heating degree days (HDD), or 19 fewer than normal, and the Mid Atlantic states of New York, New Jersey and Pennsylvania will see 47 HDD, or 14 fewer than normal. The Midwest from Ohio to Wisconsin should expect 47 HDD, or 20 fewer than the norm.

Little to no cooling demand can be expected. New England and the Mid Atlantic is forecast to see no cooling degree days (CDD), which is normal for New England, and two fewer than normal for the Mid Atlantic states. The Midwest can expect to see six CDD, which is one fewer than the norm.

Before the open Tom Saal, vice president at INTL Hencorp Futures in Miami, in his work with Market Profile saw prices working lower. "Market Profile shows horizontal [sideways] pricing now, should change to vertical [higher or lower] pricing," he said.

One of the central tenets of Market Profile is the testing of value areas, and Saal said June futures should test Monday's value area at $2.337 to $2.319. "Typically, value areas are filled the next day." The problem for the bulls is that Saal also sees the market testing value areas at $2.299 to $2.273 and "eventually" testing $2.121 to $2.087.

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