The June aftermarket was launched Friday with major uprisings in the West arrayed against a mixed but mostly moderately softer performance at eastern points. Because deals were being done for Tuesday-only flows due to the May-ending holiday weekend, the dropoff in industrial demand typically associated with a weekend was not a negative factor.

Instead, the regional variances in price trends focused on their relative weather outlooks for early this week. The National Weather Service anticipates above normal temperatures only in the Atlantic Coast area from Virginia southward in the East, with below normal readings seen for most of the rest of the area. Thus air conditioning load is likely to be substantially lower than it was early last week.

Meanwhile, the Rockies will be relatively cool around Tuesday, a western producer said, but above normal temperatures are predicted for the southern two-thirds of the states between the mountain range and the West Coast. The expected power generation load, PG&E’s lifting of a high-linepack OFO after a two-day run and the lack of trading for a weekend Friday help explain why western prices rebounded so strongly, she said.

Western gains ranged from as little as about a dime at Waha to more than half a dollar at the Southern California border. The East had numbers going all over the place, with various points flat, falling as much as about 15 cents or rising by a little more than a dime. A majority of eastern points saw losses of less than a dime.

A Gulf Coast marketer observed that quotes fell for most of the morning before recovering a bit near the end of trading. The mini-rallies may have been related to the short-covering rebound in crude oil futures, he said, but he also thought the cash market got oversold “because people were expecting even bigger drops than actually occurred,” then had to pay up a little in the late going to cover their supply obligations. He noted that things got a little confusing Friday; not only was he trading for Tuesday on a Friday, but “I also had some intraday deals to do through the end of the month.”

The marketer wasn’t sure if he really expected much softening this week. Yes, cooling load is likely to be down a little in the East, but there may still be enough to keep cash prices trading mostly sideways, he said.

Florida Gas Transmission made it a full week Friday of having an Overage Alert Day notice in effect for its market area (the notice was initiated May 22), but production-area prices into the pipe still fell about a dime.

The 2004 Atlantic hurricane season was expected to begin Tuesday with no substantive tropical activity.

In his initial estimation for the next storage report, Citigroup analyst Kyle Cooper said he looks for an injection “somewhat smaller than [the 89 Bcf in last Thursday’s report], but probably still above 80 Bcf.”

One source, noting the New York Mercantile Exchange’s announcement that beginning Monday evening it would extend the listings for its Houston Ship Channel natural gas basis swap futures contract through December 2007 from the previous June 2007, commented that he thinks a major reason why the cash market has been more closely tied to the futures market over the past year or so has been the success of Nymex’s basis swap contracts “…and probably the absence of EnronOnline. I hear the volume on these basis contracts has grown substantially.”

A western buyer said he didn’t trade much at fixed prices for the June bidweek. “Things ran up [through about midweek] and then fell, and it was more convenient for us to pick up the index-minus deals after the falloff. The [Southwest] basins were trading a lot of index minus 4s and 5s after the screen fall.” He reported seeing Permian Basin trade as high as $6.30 while the screen was still rising when it had been just over $6 earlier, so there was a pretty wide Permian range. San Juan-Blanco didn’t see as large a range, going from $5.65 to $5.75 during the same time frame, he said. “The reason for that is that not as many people trade fixed-price Blanco as they do Permian, and no one panicked.”

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