What some had expected to be moderate softness Friday turned into a general rout. Beset by generally light cooling load outside the southernmost U.S., recent screen weakness, a California OFO and the industrial load loss associated with a weekend, price drops ranged from a quarter to around half a dollar. The West took most of the heaviest losses.

Energy futures extended their slide into a third day following last Tuesday’s spikes. The natural gas screen dropped just over a dime, and July crude oil fell below $39/bbl.

Thus far the June aftermarket is extremely weak compared to bidweek prices. Across the board declines from first-of-month index levels range from a little more than 30 cents to around 75 cents. Most are in the area of half a dollar or greater. Cool weather in the Northeast has caused regional citygates to see the greatest downturn.

Other than major drops in prices, a Calgary-based producer found Friday’s market to be “pretty quiet.” He chalked up much of the cash softness as due to the screen being at $6.52-57 Thursday while cash was trading, then falling 30 cents or so to $6.22-29 during cash deals Friday. The Midwest will start heating up this week, he said, and it will be interesting to see how much gas-fired power generation gets turned on as a result.

A marketer agreed to some extent, saying, “It’s pretty cool in Chicago now, but will be getting close to 80 degrees toward the end of next week.” It seems like most of the nuclear units that had been down this spring have returned to service by now, though, so that should temper any increases in gas load for air conditioning in the North, he said.

A western marketer also attributed much of Friday’s cash bearishness to energy futures weakness over the preceding two days and continuing Friday. She also noted the weather remained very hot in California and the desert Southwest Friday, “but it’s supposed to get a little cooler by Sunday.” PG&E’s declaration of a high-linepack OFO (see Transportation Notes) helped crush prices throughout the West, she said. SoCalGas didn’t issue an OFO, but traders were worried about one still being possible, “especially the ones like me who have on-call duty this weekend.”

The marketer went on to say she also dreaded the potential for more Waha cuts like the ones she was wrestling with at midweek. The trouble, she explained, is that GulfTerra Texas just isn’t providing as much takeaway capacity from Transwestern at Waha as it should.

Besides PG&E’s OFO, another indicator of western market softness came from Kern River. After reporting normal linepack levels in all four segments earlier in the week, the pipeline said Friday linepack had gotten high again in all but the farthest downstream segment.

Cool weather in the Northeast market area means anemic power prices, which in turn is keeping gas demand low, a regional trader said. In addition, he thought the screen’s looking soft Friday morning might have hurried a few cash sellers. However, the trader said there were “great storage refill opportunities” in having citygate numbers only 20-40 cents or so above the Gulf Coast, which was a tighter spread than last month.

One source found it “interesting how the oil markets have grabbed hold of gas traders’ attention” in recent weeks and months. The two fuels pretty much used to go their own separate ways unless a wide disparity in burnertip values developed, he added.

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