Continued declines were dominant in mixed price movement Monday as weather-based load was fairly light in most areas. Heat levels remained high in much of the West but were declining in inland California from pre-weekend highs. Rockies Express Pipeline (REX) helped boost Rockies numbers by officially scheduling deliveries to Panhandle Eastern in Missouri for Tuesday.

A 30.5-cent drop by June futures on the preceding Friday contributed to Monday’s overall cash bearishness. The return of industrial load from weekend hiatus apparently had little positive price impact.

Most of the market saw declines ranging from about a nickel to nearly 35 cents. The minority gains ranged from a little less than a nickel to about 55 cents and were concentrated in the Rockies and Southwest basins, although a few Midcontinent points also advanced.

Tuesday’s cash market will have negative screen guidance after June natural gas futures extended their slide by another 14 cents Monday. This occurred despite a new record settlement by crude oil above $127/bbl (crude had visited $127-plus territory for a while last week but couldn’t stay there).

Rockies producers’ long wait for the often-delayed start-up of full service in its REX-West segment is over. REX, which had said Friday it expected to be able to start making deliveries Tuesday to a Panhandle Eastern interconnect in Audrain County, MO (see Daily GPI, May 19), confirmed in a Monday morning update that it was accepting nominations for such deliveries. An increase in demand charges for REX-West full service will become effective Tuesday, the pipeline said.

One producer estimated that the addition of Panhandle deliveries likely was raising REX-West throughput to about 1.5 Bcf/d from the 1.2 Bcf/d that a Kinder Morgan official had reported at a Colorado meeting in April. The extra 300 MMcf/d or so in takeaway capacity likely played a part in strong Rockies price gains Monday, he said, although there was also a pretty large amount of western cooling load to go around. He noted that Denver temperatures hit 83 Monday afternoon and were predicted to go to 90 at midweek, while Phoenix started exceeding 100 for the first time in 2008 during the weekend and was forecast to peak at 107 Tuesday.

Through-put on the remaining segment of REX-West may be less than expected after officials of the Department of Transportation’s Office of Pipeline Safety (OPS) said late Monday they would allow the line to go into service at a reduced pressure while they continued an investigation into safety equipment on parts of the pipeline (see related story).

Cooling load is rising in the South and Midcontinent as more and more locations start to approach or exceed 90-degree highs. However, seasonal conditions in the Northeast and Midwest meant those regions have little heating demand left and absolutely no cooling load.

Florida Gas Zone 3 was one of the few Gulf Coast points to rise Monday after Florida Gas Transmission issued an Overage Alert Day (see Transportation Notes). The Florida citygate saw a strong advance of about 40 cents.

Waha/Permian Basin prices recorded increases as they saw increased demand to both the east and west. In addition to desert Southwest temperatures hitting triple digits, intrastate Texas demand was strong as highs in the 90s and low 100s were expected in most of the Lone Star State.

New England can anticipate a new supply source in the near future. The Northeast Gateway LNG receiving system in Massachusetts Bay received its initial 1 Bcf cargo Saturday and has begun commercial operations (see related story). One analyst said the facility is processing at 50% capacity, or about 0.4 Bcf/d. The first shipment will be used to test Northeast Gateway systems, but a spokesman said the facility eventually can provide about 20% of New England gas needs.

Activity was limited north of the border as a number of Canadian traders observed the Victoria Day holiday. NOVA Inventory Transfer was traded, but no quotes were submitted for Westcoast Station 2.

Strategic Energy & Economic Research analyst Ron Denhardt looks for an 84 Bcf storage injection to be reported for the week ending May 16.

The number of active natural gas-seeking drilling rigs fell by four during the week ending May 16, according to the Baker Hughes Rotary Rig Count (https://intelligencepress.com/features/bakerhughes/). Two rigs each were removed from the Gulf of Mexico and the onshore sector. The new tally of 1,471 working rigs is up 1% from a month ago and unchanged from a year earlier, Baker Hughes said.

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