With a few western exceptions, swing prices Monday continued the downturn that had started in weekend deals. The market continued to be depressed by the lack of major cooling load outside Florida and parts of the West; in addition, Friday’s screen drop of 13.2 cents was extended by an expiration-day decline of 21.2 cents in the July contract.

Eastern points tended to fall between about a nickel and 20 cents. Many of the larger drops were clustered in the Gulf Coast and Appalachian production areas. Appalachian weakness was primarily inspired by continued low weather-related demand in the Northeast and to some degree the Midwest. Meanwhile, the widespread rainstorms that have kept most of the South from achieving normal early-summer heat levels (and in turn normal power generation loads) showed little sign of abating; they will continue at least through Tuesday, predicted The Weather Channel.

Also, Gulf Coast supply levels are getting a significant boost this week after Shell Exploration & Production announced the start of restoration of production Monday at its Mars platform in the Gulf of Mexico’s Mississippi Canyon 807 (see related story). It is expected to take two to three days before Mars reaches the volume of about 170 MMcf/d that it was producing before being shut down May 22 for repairs to the flexjoints of its oil and gas export lines.

It was a decidedly mixed bag in the West, where some points ranged from flat to up a nickel or so, but others fell by as much as a little more than a dime. The gains were believed more a reaction to a lack of California high-linepack OFOs than to any real pickup in demand (PG&E had an OFO in place for Saturday only, while SoCalGas didn’t implement its own order until Sunday).

A Northeast trader estimated that about three-fourths of swing business got done Monday before the screen “started tanking” (Nymex’s crude oil, heating oil and unleaded gasoline products saw huge losses in what was reported to be tied to the early transfer of power in Iraq Monday and the weekend resumption of that nation’s oil exports). Thus the trader expected Monday’s daily averages “probably will wind up higher” than where the gas really should have been valued. Most of the negative effect of weak energy futures should show up in Tuesday’s cash market, he added.

“We like what happened with the Nymex settlement,” commented a Midwest marketer. Her company had completed only about half of its bidweek as of Monday afternoon, so she thought it would be nice to finish up with prices lower than what was available late last week. Weather was “still very moderate” in the Midwest, the marketer said, adding she didn’t think Michigan was getting above the mid 70s Monday.

Several sources agreed that bidweek numbers continued to move lower Monday along with the screen, but weak next-month fundamentals also played a part. The Northeast is refusing to enter summer so far, said a marketer in the region. It’s still more like spring here, which is keeping load low, he added. Also, fuel oil is still priced below gas at Northeast burnertips, so that’s further diminishing gas load, he said.

Lehman Brothers analyst Thomas Driscoll said he expects a storage injection of 95 Bcf to be announced for the week ended June 25. That would be slightly less than the comparable year-ago build of 97 Bcf, he said. Citigroup’s Kyle Cooper made a final estimation of a build between 89 and 99 Bcf in the upcoming report.

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