Though the official start of summer is still a couple of weeks away, rising heat levels Monday made it feel like the season was already well under way. The pickup in power generation load combined with the screen’s continuing climb and the return of industrial demand from its usual weekend hiatus to create double-digit cash price increases at all points.

All the gains were very large in ranging from about 40 cents to about 75 cents at several points in the Northeast and Permian Basin-Waha area.

Price firmness is expected again Tuesday due to cooling load remaining high and July futures tacking on an additional 24.2-cent advance Monday to settle above $7. Once again the natural gas contract went its separate way from Nymex’s crude oil offering, which dropped 54 cents to $54.49/bbl. Unleaded gasoline at New York Harbor also dropped, but heating oil futures were up along with natural gas as worries persisted about tight supplies of the fuel next winter.

Outside of the torrid desert Southwest, much of the West will be relatively mild Tuesday. But regional prices got a boost from SoCalGas lifting a weekend OFO (see Transportation Notes) and from increased air conditioning load to the east. Meanwhile, highs in the 80s and 90s are predicted for Tuesday in the South and central U.S., while mercury levels in the 80s are expected in the Midwest and parts of the Northeast.

A producer who said he was “getting tired” of the fourth or fifth straight day of rain in the Calgary area Monday said he was definitely seeing the impact of rising temperatures on his sales to power generators. In addition, he said, a lot of plant turnarounds are occurring in Alberta currently, keeping a fair amount of supply off the market. Next week it will be Westcoast’s turn for some supply tightness, he added, when the pipeline’s McMahon Plant goes down partially on June 16, followed by about three weeks of zero output starting June 21.

A Midcontinent marketer also reported increased sales related to the heat, saying the region’s electric utilities were buying significantly more gas Monday than they were last week. It’s “not terribly hot” yet, he added, and most of the increase in electric load was happening in the production area and not as much in the market area. He expects modest firmness in the cash market Tuesday based largely on the futures gain of nearly a quarter Monday, saying prices had achieved most of their newfound cooling premium already.

“We’ve got some air conditioning load going in both the North and South,” said a Gulf Coast producer. The Northeast finally started getting some summer-like heat Saturday, he said, with highs in the New York City area going straight from the 60s to the 80s in just a couple of days. He also perceived some cash market strength as being derived from short-covering purchases and the residual effect of natural gas futures climbing higher every day so far in June. He noted that Transco Station 65 had gone back to trading about nickel over Henry Hub Monday after being a nickel or so behind Hub last week when there was no substantive heat in the market area. He also expected “more of the same” (higher prices) Tuesday, but said it was hard to figure why the screen was running up so high Monday.

Citigroup analyst Kyle Cooper thinks the market achieved its first triple-digit storage injection of the year last week, saying he expects a build of 101-111 Bcf to be reported for the week ending June 3.

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