Physical gas prices overall for the extended holiday weekend fell 3 cents, with double-digit losses posted at California points and losses in place at eastern and Midwest locations as well. About two-dozen points scored gains. Futures prices eased as well, and at the close June had lost 2.4 cents to $4.237 and July was off 2.3 cents to $4.284. July crude oil fell 10 cents to $94.15/bbl.

Gas buyers in the Midwest have had to deal with widely fluctuating temperatures in making their gas purchases and scheduling injections. “This is the yo-yo season — cold, hot, cold — but it didn’t get as cold last night as forecast, only in the 50s, but they had forecast in the 40s,” said a Midwest utility buyer.

“We didn’t make any additional purchases for gas over the weekend, and we are down to baseload gas. We have had a little bit of usage the last couple of days because it was cooler, but for the most part people are switching from space heating to air conditioning. There is no real need for gas this weekend. Highs are in the 80s and lows in the 60s, but we may have to pick some gas up next week when it gets warmer and the power plant kicks in. They said they weren’t going to be needing any this weekend.

“We were running about 42,000 Dth as of this morning, and since it’s a holiday weekend, we may hit 33,000 Dth/d. We have a wide swing on our loads. We go from 30,000 Dth/d to 300,000 Dth/d. Unless the electric guys are using gas, that is the only thing that makes it challenging in the summer,” he said.

Gas for delivery over the weekend and Tuesday on Alliance fell 7 cents to $4.18, and deliveries into the Chicago Citygates slid a nickel to $4.19. On Northern Natural Ventura, gas came in at $4.07, down a penny, and packages on Demarcation were flat at $4.09.

Temperature forecasts at Mid-Atlantic points were expected to keep a lid on any significant cooling requirements. AccuWeather.com predicted that Friday’s high in New York City of 65 would ease to 57 on Saturday before climbing to 73 on Tuesday. The normal high in New York is 73. Philadelphia’s Friday high of 67 was forecast to slip to 62 Saturday but bounce back to 76 by Tuesday. The seasonal high in Philadelphia is 76. Washington, DC’s Friday high of 60 was predicted to rise to 70 Saturday and reach 80 by Tuesday. The normal high in Washington this time of year is 77.

Parcels for weekend and Tuesday delivery on Dominion fell 9 cents to $3.99, and gas on Tetco M-3 shed 6 cents to $4.10. Gas headed for New York City on Transco Zone 6 dropped 11 cents to $4.05.

West Coast gas suffered a double-digit drubbing at some points as Pacific Gas and Electric declared an operational flow order for Saturday due to too high an inventory. Weekend through Tuesday packages into PG&E Citygates fell 3 cents to $4.21, and deliveries at the SoCal Citygates dropped 14 cents to $4.17. Gas at SoCal Border points fell 8 cents to $4.04, and gas on El Paso S Mainline was down 15 cents to $4.05.

Futures traders were keying on Tuesday’s June options expiration and Wednesday’s futures expiration and one New York floor trader said, “I think we’ll trade down to $4.10 by Wednesday. The market is better offered and feels a little soft. Maybe it’s profit taking before the weekend.”

Longer term, traders are standing aside for the moment. “[W]e are favoring a sidelines posture ahead of a long weekend that could bring some major shifts in the temperature views. For now, much above-normal temps across a broad swath of the Midwest are still widely being projected with practically all views extended through the first full week of June,” said Jim Ritterbusch of Ritterbusch and Associates.

Near-term, Ritterbusch is cautious. “Assuming even a minor shift toward moderation within the weekend weather updates, we could see the market coming under pressure next week with July values relinquishing a larger portion of this week’s gains. Looking out into next month, we are continuing to emphasize gas-to-coal switching as taking on increased importance and possibly providing a sizable cushion against occasional hot spells during the summer months. With this factor in mind and incorporating a stronger-than-expected production pace into the equation, we feel that a return to a $3 price handle is still a high probability. Consequently, we suggest holding any long winter-short summer spread positions.”

June central Appalachian coal futures settled unchanged at $61.42/ton or $2.67/MMBtu Friday.

Longer term, weather bulls look to be in good shape going forward. MDA Weather Services in its Friday morning six- to 10-day outlook showed above to much above normal temperatures east of the Continental Divide. The greatest anomalies are concentrated in the Great Lakes, Ohio Valley, Mid-Atlantic and New England. The West is expected to see strong below-normal temperature readings.

“The strong heat event is still on track, with the focus of the most intense heat found during the first half of the period in the Midwest and the latter half in the East. Peak temps in the upper 80s to lower 90s should be common for at least a couple of days for most key areas of these regions, which for most will equate to the hottest levels so far this year,” the forecaster said.

“The Western U.S. still carries a cool look in general, though some faster warming trends may arrive towards period’s end near the coast. Models are in decent agreement until late when they diverge, especially over the western half.”

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