With support from the rally late last week in natural gas futures prices, a vast majority of cash market points on Monday followed suit, gaining a few pennies to as much as 30 cents. Sizzling record-setting temperatures in the West led to some of the largest gains, but air-conditioning load wasn’t yet playing much of a role according to traders.

Using the 13-cent gain on Friday in May futures as a backdrop, eastern cash point averages climbed mostly from a nickel to a dime, while most Gulf Coast region points gained a nickel or less. Midcontinent gains were a little more substantial with increases ranging from a penny or two up to a quarter. No stranger to warm weather, western points appeared to actually have been caught off guard by some early intense heat. With the exception of the PG&E Citygate, which only gained 6 cents, a majority of Rockies and West Coast cash point averages climbed between 20 to 30 cents.

“We are definitely seeing some serious heat coming into the West early this year. It was 84 degrees inside at about 8 p.m. last night, so the AC went on,” said a West Coast trader. “This is extremely early for this type of heat. We are seeing it translate into prices a bit, but I haven’t seen a whole lot of the cooling load kick in as a result. It takes a while for houses to warm up before people resort to kicking on the air conditioning. Most people are willing to deal with a couple of days of really hot temperatures.”

AccuWeather.com meteorologist Eric Wanenchak documented the record-breaking heat in the West and warned that it might be around for a few days. “For the second day in a row, unseasonably warm temperatures will dominate the western third of the country,” Wanenchak said. “Record high temperatures will be challenged on Tuesday across much of California. San Francisco’s high of 88 on Sunday shattered the previous record for the date by 5 degrees. A heat advisory remains in effect for the Bay Area [on Tuesday], as high temperatures will be similar to what occurred on Monday.”

The meteorologist noted that downtown Los Angeles soared to 94 degrees on Sunday, breaking the previous record of 92 degrees which stood for 95 years. “Even closer to the coast, temperatures climbed into the upper 80s to set records at Los Angeles Airport and Santa Barbara Airport.”

The West Coast trader warned that if the heat were to stick around longer than a few days, the cooling load would definitely factor in. “If this were to extend for a week or so, it would certainly translate over to extended EG [electrical generation] load,” he told NGI. “The EG load did pick up a little bit Monday morning — probably due to people like me — but not enough to really bump demand up. The good news is it is supposed to cool off by the end of this week, so we’ll have to see.”

Looking at the natural gas market’s larger dynamic, the trader said burying gas in storage is an attractive option at current prices. “My take is people are just trying to move gas against forward prices, so they are stuffing it into the ground as much as possible. We are paying $3.40 at the gates compared to last year when we were paying $10-11 for the same days. Prices were three times higher last year, so people are taking advantage of those prices and the timing and shoving gas away for down the road.”

Another weakness blip could be ahead for cash prices on Tuesday if traders heed the futures market tea leaves. The May contract dropped 18.9 cents during Monday’s regular session to close at $3.540 (see related story). June futures followed suit, declining by 19.5 cents to close at $3.667.

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