Cash prices not only sustained their bullish streak that started last Thursday, but also built momentum Monday with gains in many cases even larger than those preceding the weekend. And the ride higher isn’t finished yet, according to some sources. “I expect a $6.75 on the screen tomorrow [Tuesday] and cash will also keep rising,” a marketer predicted.

Continuing cool temperatures in the Midwest and Northeast, along with a stormy front that limited really hot weather in the South to the Gulf Coast states, seemed to argue fundamentally against higher prices. But traders pointed to other factors: all of the energy futures complex remained very strong; the Atlantic hurricane season got launched Sunday just after renewed forecasts of an extra-busy one; and the year-on-year storage deficit still weighs on market psychology.

Monday’s advances ranged as low as 5-15 cents at a few points, but the great majority were between 20 cents and 40 cents.

Natural gas futures tacked on another double-digit gain of slightly more than 16 cents to Friday’s increase of 18.5 cents. Perhaps even more impressive was the action in the nearby crude oil and heating oil pits, where both commodities skyrocketed. Crude’s dollar-plus uptick carried it to $30.71/bbl, within shouting distance of the $31 level, as positive economic news led traders to anticipate rising demand at a time that stockpiles are dwindling.

“We’re warming up a bit, but just going from cool to mild,” said a Northeast utility buyer. She added that her furnace had been on as recently as Sunday night, and had an acquaintance in upstate New York “tell me about scraping frost off their windshield.” Unseasonably mild temperatures probably will last through this week, the buyer said, but “it looks like we might get some real warmth next week.”

Prices were rising fairly steadily throughout the morning, led by Transco numbers that at one point were about a dime ahead of the screen at Stations 65 and 85, a Gulf Coast trader said. There was some incremental increase in Southern power generation demand Monday, but it wasn’t all that big, he added. “A lot of it [cooling load] was around in the South for the weekend, and there’s not that much more today [for Tuesday flows],” the trader said. He reported having several customers in the process of fuel switching away from gas, and wasn’t sure whether crude approaching $31/bbl would be enough to quash that trend.

Noting that Florida Gas Transmission was again warning market-area customers Monday of a “potential” Overage Alert Day, a Florida buyer said the pipeline more and more this year seems to be getting what it needs through such alerts without actually having to implement an OAD.

Analyst Thomas Driscoll of Lehman Brothers predicted that EIA will announce an injection of 100 Bcf for the week ended May 30 in Thursday’s report. “This would leave storage inventory levels at 1,185 Bcf, 769 Bcf lower than last year and 483 Bcf lower than the five-year average,” he said.

Kyle Cooper of Citigroup, who had forecast a “build in excess of 110 Bcf” Friday, said Monday his final estimation is for an injection of 109-119 Bcf. “If the actual injection exceeds 111 Bcf, this will be the largest injection on record according to EIA data,” Cooper continued. “The AGA did report a build of 120 Bcf in 1994 with other builds larger than 111 Bcf as well.”

©Copyright 2003 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.