Cash prices lost the support they had been deriving from strong energy futures Tuesday, and a near-total lack of cooling load in northern market areas appeared to be finally bringing a three-day upward run to a halt. Flat numbers dominated trading, with few points outside the San Juan/Rockies market varying by more than a nickel up or down from unchanged.

Following Monday’s activity in which the natural gas, crude oil and heating oil futures contracts all registered large advances, gas dipped a little more than a nickel Tuesday while the oil commodities were essentially flat. Another bearish factor cited by a couple of sources was expectations of the Energy Information Administration reporting a 100 Bcf-plus storage injection Thursday.

The West continued to monopolize hot-weather demand, and even that region, where most of Tuesday’s softness was concentrated, is due for a bit of cooling off. Meanwhile, much of the South outside of Texas and the area along the Gulf Coast remains unseasonably mild thanks to a recent spate of cooling heavy thunderstorms. And the Midwest/Northeast market areas seem to be permanently trapped in a movie production titled “The Winter That Wouldn’t Die.”

“We had to buy intraday gas [Tuesday] because of the cold weather,” which was in the 40s and 50s Monday night, said a Midwest utility buyer who moved to the region from the South earlier this year. “My husband and I keep asking ourselves: ‘When’s it going to be summer here?'” There’s still no sign of when weather is going to turn more “summerish” in the Midwest, she said, adding, “Of course, even when it does get hot here, it won’t have as much impact on power generation load as [it does] in the South.”

Despite numbers leveling off from an upward incline, a Northeast trader doesn’t see any looming crash. Instead, prices look to be “kind of range-bound for a while now,” he said. “I don’t see anything to push the market big in any direction.” Maybe a super-big or super-small storage injection report or a Gulf of Mexico hurricane might do it, but those prospects are pretty iffy at this point, he said. In addition, there are no significant changes from mild Northeast weather on the horizon. The trader noted that moving gas from South Texas to the market area has been economical at times and not economical at other times in the last month or so, but “it’s been very difficult to cover the variable costs” from Louisiana supply sources to the citygate lately.

Most of Tuesday’s larger declines of up to a quarter or so occurred in San Juan Basin and on a few Rockies pipes. It appeared those points might be strong enough at first to join the overall market as mostly flat, a marketer said, “but then they got a dose of ‘California-itis’ when power prices dropped 10 bucks there.” Also, the Rockies is losing much of the cooling load that it had shared recently with the desert Southwest and inland California. A cool front moving into Colorado was taking Denver-area temperatures down to the 50s from what had been 80-degree highs, the marketer said. In addition, much of the West is due to cool off a bit later this week, he added.

Although the utility did not issue an OFO, a bulletin board projection of over-maximum linepack later this week helped depress PG&E citygates by about a dime.

June has commenced with a general absence of heat in the central or eastern U.S., according to an advisory from consulting firm Weather 2000. “Other than fluctuations flirting with seasonable temperatures, [a] cool/temperate mild regime continues for [the] eastern half of the nation. The very cool, raw days (often from closed lows), will give the perception of moderation, but sustained heat (especially during the daytime), should be confined well to the west of the Mississippi River. Central locales will take their turn experiencing some of the coolest anomalies as air masses pour down from Canada, while the Mid-Atlantic gets a little break with some more early-June-like weather.”

Citigroup analyst Kyle Cooper observed that at this time storage injections “must average 116% of the five-year average to reach 2,800 Bcf. That level is still considered relatively low if the winter is cold, and price spikes in November or December could be quite severe if early cold encompasses major population centers. However, considering the recent bearish temperature-adjusted storage changes, mild weather could also lead to significant price declines.”

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