Post-holiday heat forecasts and futures gain prove sufficient to rally most of the cash market.

Predictions of significant heat levels either being sustained through the weekend in some areas or returning by Memorial Day or earlier in others, abetted by the previous day’s 11.5-cent futures advance, resulted in cash increases at a large majority of locations Friday.

The typical low demand of the holiday weekend had managed to cause mixed price movement Thursday, when gas was traded for flows through Monday. But some areas that had been relatively cool last week were due to experience warmer conditions this week, and brief cooling trends in the Northeast and Midwest would be reversing by the holiday.

Friday’s deals for Tuesday gas featured gains ranging from a couple of pennies to about 20 cents. A modest majority of the upticks were in single digits, while the largest increases were concentrated in the Midcontinent and Rockies. A few points were flat or about a nickel lower.

Showers and thunderstorms during the weekend would dampen air conditioning load to some extent in the South, but the early part of this week is forecast to have highs in the mid to upper 80s and low 90s from Oklahoma and Texas through the South Atlantic coast. Meanwhile the West Coast, which was on the cool side last week, was due to see temperatures warming through the weekend.

However, Northern Natural Gas indicated that while Upper Midwest temperatures were warmer than usual going into the weekend, cooler conditions would be in effect soon. Saying the pipeline’s normal system-weighted temperature is 62 degrees at this time of year, a bulletin board posting projected that Friday’s average of 72 would rise to 75 Saturday before retreating to 66 Sunday.

The reinstatement of a high-linepack OFO for Saturday by SoCalGas obviously had no negative impact on gas being traded for Tuesday. The Southern California border was up Friday about 15 cents, while IntercontinentalExchange reported volumes traded via its online platform rising from 529,000 MMBtu for the weekend at the border to 711,600 MMBtu for Tuesday and from 180,300 MMBtu to 314,000 MMBtu at the SoCal citygate.

A Midcontinent producer noted that with peak temperatures in the Sooner State expected to remain around 90 or slightly higher, OGT prices were still outpacing those on some of its neighboring interstate pipes such as ANR Southwest, NGPL-Midcontinent, Panhandle Eastern and Southern Star Central. Substantive cooling load was the chief reason for the renewed price firmness, he said. Numbers tended to follow an up-down-up pattern as the morning proceeded, he said, adding that June aftermarket pricing was starting out higher than what he perceived as apparent first-of-month index levels.

Other analysts such as Citi Futures Perspective’s Tim Evans may disagree, but Edward Morse and Teri Viswanath of Credit Suisse said Friday that as the industry “transitions to the cooling season, we expect a slowdown in weekly injections as storage begins to compete with power demand.” However, they maintain that stronger year-on-year injections during the third quarter will likely elevate total working gas in storage back to year-ago levels, “dampening the prospect of a sustained rally this summer.”

In a significant reversal from the previous week’s advance of 18, the number of drilling rigs searching for gas in the U.S. fell by two to 967 during the week ending May 28, according to Baker Hughes. Both deactivations occurred in the Gulf of Mexico, dropping the count there to 19, while the onshore tally remained steady at 948.

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