Essentially ignoring an expiration-day dive by the June futures contract, eastern points (except for moderately weaker Midwest citygates, Appalachian pipes and Trunkline in Louisiana) tended to range from barely lower to as much as about a nickel higher in late-May swing trading Tuesday. Most increases, though, were little above flat.

The market picture was generally stronger in the West. Despite a new high-linepack OFO by PG&E (see Transportation Notes), border-PG&E was the only California point to respond with a drop of about a quarter. One source suspected there was price support at the other California points because few traders expected the OFO to last beyond today. “Temperatures are popping up again in Northern California and likely will be reaching the 100s in inland areas through Thursday,” he said. However, the burst of heat will be short-lived and regional weather should be cooling off again by the weekend, he added.

Rockies prices also outperformed the overall market with gains ranging from the teens in San Juan Basin (Blanco) to the 20s (Questar) and 30s (other Rockies points). There were no significant supply or transportation outages, a marketer noted. He thought that with Rockies numbers having gotten so low going into the holiday weekend, there was kind of a “natural rebound” that still failed to recover all the price ground lost on Friday. He also reported seeing some storage buying in the Rockies.

Flat pricing at Sumas and declines on either side of a dime at Stanfield and Kingsgate probably reflected Northwest Pipeline’s lifting of an entitlement for supplies northbound through Kemmerer Station (see Transportation Notes), a western trader said.

Some of the East’s modest firmness represented the normal pickup in demand following a holiday period downturn, a Gulf Coast producer said. But Southern air conditioning demand appears to be on the rise after an unusually cool spring in many areas, he said. The nation’s coolest weather currently is in the Upper Midwest, so citygates in the area fell from about a nickel to a dime.

“It was a busy holiday weekend for me with those changing [PG&E] OFOs,” commented one western trader. Monday’s “was the first Stage 4 OFO ever in my memory.” It didn’t make much difference to gas prices that Unit 2 came back online Monday at the Diablo Canyon nuclear plant after a 29-day refueling outage (the plant’s shortest ever), he said, because all generating plants in the state appear to still be at maximum operation as the heat rises.

Possibly to head off calls from incredulous market surveyors such as GPI, one marketing firm appended this note to its usual daily price e-mail: “Yes, that PG&E Topock number is right – $3.10.” That’s because it has been a solid year since May 2000, when Southern California border quotes were last in the vicinity of $3.10. However, $3.10 represented the bottom of the border-PG&E range; the average was around $3.80.

The year’s first hurricane has arrived and it’s a very strong Category 4 storm. However, Adolph is not of concern to gas markets because it’s a Pacific-side hurricane off the western coast of Mexico.

The June market was obviously much much weaker following the weekend due to the screen plunge of nearly a quarter, a producer said. Midcontinent pipes in general were trading in the mid $3.60s Tuesday, he said, and Panhandle Eastern basis was minus 12-10. A western marketer also reported a big dropoff in post-holiday June numbers. He did PG&E citygate deals around $7.25 Tuesday, down about $2 from Friday, and said Malin at $4.95 had fallen by a similar amount.

Another source sees some reason for aftermarket bullishness, though. “People realize that although the temperatures out West are relatively mild now, the bullish weather is right around the corner. We may see another couple of weeks of normal mercury readings, but eventually the summer temps will kick in and the market will respond accordingly.”

©Copyright 2001 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.