The slide that started Wednesday in cash prices got quite a bit steeper Thursday in trading done through the end of the month because of the Memorial Day holiday. Friday’s deals will be done for flows next Tuesday.

The previous day’s weakening of energy futures set the tone for cash declines Thursday, but traders also were seeing cutbacks in power generation load from receding hot weather, along with anticipating the major demand slump of a holiday weekend and milder weather forecasts for much of the U.S. next week.

Drops ranged from a dime to nearly 60 cents, with most of the larger downturns concentrated in the West and Northeast. Mild to cool weather accounted for the Northeast weakness, while a continuing OFO amid an excess of supply pushed western numbers much lower.

PG&E extended a high-linepack OFO with zero tolerance for positive imbalances into at least a second day Friday, and Kern River continued to report high linepack levels in all segments Thursday, even after issuing a Critical Notice against banking gas on its system the day before (see Daily GPI, May 27). However, at least one source was unable to account for border-SoCalGas again handily leading the price-plunging points, despite the giant distributor having no OFO of its own in place. The PG&E citygate’s dip of about 30 cents Thursday was only about half of the loss at border-SoCalGas, he noted.

It should be pretty cool in the Chicago area and other parts of the Midwest this weekend, but don’t expect any heating load, a trader said. It probably will just have people closing their windows again, he said. He noted that the market had gotten a little taste of summer for a while, but it looked like that was retreating at least through next week.

The Energy Information Administration estimated a storage injection of 89 Bcf for the week ending May 21, which was within the range of all prior expectations but just under the consensus 90-95 Bcf range. July gas futures likely were responding more to a dive of more than a dollar in Nymex’s crude oil contract than to the storage report, but the screen ended the day with a drop just shy of 16 cents.

However, a Gulf Coast producer who apparently perceived EIA’s report as slightly bearish thought it “interesting to see a true [futures] market reaction. It’s been a while.” The market had not adjusted for the weekly estimate the way it normally does, he added. “Usually the screen has already accounted for the storage report by the time it is released. I guess some people must have been caught off guard.”

There had been lots of strength in the June market until Thursday, the producer continued. He thought the storage report’s indication that injections are proceeding at a rapid clip was partially responsible for some major June selling at Henry Hub.

An industrial end-user reported finding “nothing really interesting about this bidweek” other than the big price jumps. But he added that supply offers for June were much more readily available than they had been for May. The end-user also noted that index premiums weren’t as high as before, saying he saw the Chicago citygate at index flat to half a penny higher.

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