The cash market added the previous day’s 11.2-cent screen gain to the modest amount of heating load it is experiencing and got the sum of rising prices Tuesday. Rockies/Pacific Northwest/San Juan quotes tended to lead other market areas in achieving overall increases ranging about a nickel to nearly a quarter.

Traders agreed that the strength of energy futures Monday was the chief driver of Tuesday’s cash upticks. They also agreed that the retreat of 18.2 cents Tuesday by June natural gas futures, coupled with major weakness throughout Nymex’s petroleum complex, will send cash sliding again Wednesday.

Despite May getting off to one of its frostier beginnings (some parts of the Midwest may record date-specific record lows Wednesday morning, The Weather Channel said), the temperatures aren’t cold enough to offset the negative influence of a large screen reversal to the downside like Tuesday’s, one source said.

Once again petroleum-based futures seemed to have the natural gas contract on a leash. Crude oil for June delivery plunged nearly a dollar and a half to settle at $49.50/bbl, below the key psychological level of $50. The big downturn was attributed to expectations that bearish increases in U.S. petroleum product inventories will be reported Wednesday morning.

The West’s relatively greater firmness resulted from PG&E ending a high-linepack OFO and from occasional snow mingling with highs not expected to get above the 40s Wednesday in some of the region’s mountainous areas. Highs in the 90s in the desert Southwest may be prompting some extra power generation load.

Cash was basically following the Nymex higher from the day before, said a Northeast trader who noted that many eastern gains were in the low teens, matching up closely with the screen’s prior-day increase. Prices started strongly and then stayed range-bound the rest of the day, he said. They came off a little near the middle of the trading session, but later regained that bit of lost ground.

The Northeast is still seeing some heating demand, but that will be fading by the weekend with a return to normal heating degree days (HDD), the trader said. However, he heard that the region was already down three HDDs from usual since the first of the month. There still may be incentives to buy gas for storage injections, he said, but Tuesday’s market was driven more by heating load and less by injection purchases than before.

A Midcontinent producer said he expects prices to stay weak for most of May because many power plants that were offline for maintenance last month are either back on-line or in the process of returning to service. He pointed out a sign of approaching softness (besides the Nymex drop): “In five minutes today [Tuesday] one [Midcontinent] pipe dropped from $6.45 to $6.35,” and producers were still eager to take the lower price.

“There’s a little maintenance here and there” in the Rockies, but nothing major, said one regional producer. She agreed with the market consensus that cash rode the screen higher Tuesday and will ride it back down Wednesday.

In contrast to last week’s call for below normal temperatures throughout most of the eastern three-fourths of the U.S. in the current workweek, the National Weather Service (NWS) predicts above normal readings in the eastern U.S. during the May 9-13 period. The only sections where it doesn’t expect above normal conditions east of a line running from the northwest corner of Minnesota through the Midcontinent and splitting Texas down the middle is in Florida and all of New England but Connecticut. NWS looks for below normal temperatures everywhere (except in the northwestern half of Washington) west of a line along the Montana-North Dakota border and continuing southward through western New Mexico.

In forecasting an injection of 25 Bcf for the week ending April 29, Lehman Brothers analyst Thomas Driscoll added, “If we are correct, the storage overhang will decrease by 40 [Bcf] to 279 Bcf versus the five-year average.”

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