Prices were up across the board Thursday in what traders agreed was a purely Nymex-driven cash market. In the absence of any substantive fundamental demand, physical numbers derived virtually all of their support from Wednesday’s 41-cent screen spike, they said.

A large majority of points recorded double-digit gains, but upticks were as small as a couple of pennies at the Southern California border. The West saw most of the smallest increases, which ran as high as a little more than 35 cents in a couple of cases.

Northern California prices continued to feel negative pressure from a high-linepack OFO that PG&E kept in place through Friday (see Transportation Notes). However, after falling a few cents Wednesday, Malin and the PG&E citygate saw fairly strong advances of about 15 cents and 12 cents respectively Thursday. Somewhat curiously, the Southern California border managed only a tiny gain despite SoCalGas not calling an OFO for Friday. The disparate price movement left the PG&E citygate at a premium of about 35 cents to border pricing.

The Energy Information Administration reported a storage injection of 86 Bcf for the week ending May 27. The volume was comfortably within the range of prior expectations but slightly below consensus estimates, which made it just a tad bullish to some traders. But after driving July futures to a $7.02 high at one point, Nymex traders staged a retreat of about 20 cents to have the contract end the day up 3 cents at $6.819.

The weather outlook for Friday calls for generally moderate temperatures in almost every region, although parts of the South are due to record highs on either side of 90 degrees.

“There’s no fundamental reason why” prices were up so strongly, said a Gulf Coast marketer, so he could see nothing besides the screen to “blame.” He felt that Wednesday’s gas futures spike was largely led by oil prices and not at all by the merits of the gas market itself. Despite Gulf Coast prices making strong advances of 20 cents or more, he reported getting fewer supply orders from electric generators Thursday than he did the day before, adding, “Go figure.”

The marketer said he sees current cash prices as kind of like an oxymoron: their behavior seems to be just the opposite of what it should be. It’s hard to say whether quotes will keep rising Friday after the screen gyrated between much stronger and mildly firmer Thursday, he added. Futures seemed very strong when they broke above $7, but then the day’s end result was only a small gain, he said.

Weather and storage factors are still soft, so Thursday’s cash strength was “pretty much all based on the screen spike” Wednesday, commented a Gulf Coast producer who trades the Northeast. Even with the impressive gains, cash “seemed” kind of weak as it was trying to pull away from the screen, he said. He noted that Transco Zone 6 non-New York City was about 23 cents above Henry Hub, which didn’t cover transport costs, but Transco Station 65 quotes were running nearly a dime below the Hub, so that was “just barely transportable.” There’s hardly anything in the way of weather load in the Northeast, the producer said, with the New York City area’s high expected to be around 70 degrees Friday.

It’s “pretty ho-hum for us” without much gas load, said the buyer for a Lower Midwest utility. She saw “a little bit” of power generation demand, and the company was doing a small amount of storage injection, but generally throughput is currently low. The weather will get a few degrees hotter over the weekend, she said, so the utility was likely to see a rise in generation load.

A Canadian trader said he only had a little bit of gas to sell at the Chicago citygate and many meetings to keep him busy Thursday, so he based his deal on an Alliance-delivered index. Calgary-area temperatures are very comfortable around 70 degrees F., he said, which limited an intra-Alberta advance to a little more than C15 cents.

In its six- to 10-day forecast for the June 7-11 period, the National Weather Service (NWS) expects above normal temperatures within sections of the Midwest and Northeast, starting from the Dakotas to the west and dipping southward into northern Kansas and Missouri, but omitting the southern ends of Illinois, Indiana and Ohio and also the coastal ends of the Northeast states. NWS also looks for above normal conditions in virtually all of Texas except for the Panhandle area. Except for a thin strip along the Pacific Coast, below normal temperatures are forecast west of a vertical line running from western Montana through the western edge of New Mexico. NWS also predicted below normal readings for Florida and the coastal ends of Georgia and the Carolinas.

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