For the second day in a row El Paso’s San Juan-Blanco pool was the odd point out Wednesday amid a continued firmness in prices overall. At other locations quotes rose between a nickel (CIG) and about 20 cents.

Although the general temperature trend remains mildly upward, it is not a consistent one. But the incremental increases in cooling load, combined with more fireworks in Nymex’s energy futures complex a day earlier, were enough to spark further advances in the physical gas market.

How much longer cash gas can depend on the screen for support is questionable. Although crude oil for June recorded the highest daily settlement ever at $40.77/bbl and unleaded gasoline at New York Harbor spiked again to the latest in a series of record highs at $1.3750/gal, the natural gas contract was up only 1.9 cents Wednesday. “That [gas screen’s rise] was kind of puny in comparison with the petroleum products,” commented one trader.

Warmer weather patterns remained mixed. Although high temperatures in the 80s or above Wednesday stretched from the desert Southwest through the South and Midcontinent into the Midwest and Mid-Atlantic, the mercury had receded again in the upper Northeast thanks to the advent of a cold front. Also, a much larger cold front curving southward from central Canada was keeping overnight lows in northern Rockies and Upper Plains states within hailing distance of freezing.

The air conditioners are gradually becoming more active throughout the South. That was obviously so in Florida, as hot weather demand in its market area prompted Florida Gas Transmission to issue an Overage Alert Day notice (see Transportation Notes). All three production-area FGT zones from South Texas to the Mobile Bay area, along with Florida citygates, registered hefty upticks that were among the Gulf Coast’s largest of the day.

And although New England and upstate New York had cooled off a bit, Northeast citygates saw solid gains from the mid to upper teens. The regional bullishness likely was enhanced by real-time electric prices in southern New York surpassing $300/MWh after a lightning storm forced the state’s Independent System Operator to cut transmission line capacities (see story in Power Market Today).

Western Canada is another area still experiencing unusual chill for this time of year. “I guess we haven’t gotten the message here that it’s spring; it’s snowy and cold today,” said a Calgary-based producer. He noted that market liquidity was kind of low around the Chicago area Wednesday, adding that most customers seem fairly well balanced on supply for now. Some gas-fired power plants in the Midwest are coming up and testing equipment in preparation for summer heat, he said, but it hasn’t made a significant contribution to air conditioning load yet because daily highs were just barely getting above the 70s Wednesday. All in all, it was one of the quietest market days that the producer could remember in quite a while.

Gas buyers shouldn’t be especially surprised at the strength of mid-May pricing that many of them feel has no fundamental justification, one source observed. He harkened back to the May bidweek, in which a recurring theme among trader comments was a perception of lack of supplies coupled with plenty of demand (see NGI’s Bidweek Survey, May 1). That should have clued people in that any semblance of normal May warmth was likely to result in a strong aftermarket, he said.

The mystery of El Paso-San Juan’s big rebound on Monday due to the start of a four-day reduction of 435 MMcf/d on Transwestern capacity out of the basin deepened as El Paso’s Blanco pool fell nearly 20 cents and Bondad quotes were flat amid Wednesday’s general market strength. However, the big constraint is scheduled to drop to much less invasive levels after Thursday, so a recovery in San Juan prices is likely in Thursday’s trading.

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