Wednesday’s last-day plunge in June futures had cash sellersrunning scared, sources said. However, basis differentials did notappear to be changing much if any, a Gulf Coast producer said, sobidweek deals done prior to Wednesday afternoon will tend to beanywhere from 6 to 10 cents above the current market. He was makingsales Wednesday at $2.00-02 for Henry Hub and $1.99-2.00 forColumbia Gulf-onshore.

Another producer saw Transco Station 65 maintain a premium tothe screen as his deals sank from $2.10 early on to a low of$2.055. He thinks the cash market for June has bottomed out nowthat the last-day screen volatility is over.

The June market “is doing just what we thought it would do,which is [go] down,” a marketer told Daily GPI. Things were alreadylooking bearish technically, he said, and in addition this isusually the time of month where “fundamentals take over the show.”There’s just not a lot of weather load at this time, and thecontinuing buildup of storage surplus over last year reported byAGA just contributes to the negative drag on gas prices, he noted.

“I think there will be a lot of people short for June,” themarketer went on. “This, however, could be a good reason to be longfor the month. Usually a short squeeze develops when too manypeople go short and wait for the day market.” But an argumentagainst going long is that “people aren’t really aggressive to buyanything baseload when they know they can dip into storage andstill stay ahead of last year.”

A Western marketer reported getting June offers at index minus 3for several Western points and was able to pick some El Paso-Blancogas at index minus 3.5. Lack of cooling-load weather “outside mywindow or in the short-term outlook has sellers in a bit of afrenzy to get rid of their gas,” he said. However, the marketer sawthe fact that Topock (Southern California border) is trading atbasis of plus 1-2 for June but showing basis of plus 13-15 for Julyand August indicates “people are concerned about the summer, maybejust not all that concerned about June.” Given a blast of heat,June could do the opposite of May, where strong pricing for bidweekbaseload was followed by widespread softening in the aftermarket,he said. If much warmer temperatures arrive, bidweek prices “couldprove the best value [for buyers] of the entire month.”

A trader who had been hearing either side of $1.70 for theRockies in general last Friday said numbers were down to the low$1.60s after the screen settlement. Another source said Chicagocitygates were in the low $2.10s Wednesday, down from the high$2.10s Tuesday.

The waning May incremental market, having already wound upactivity before the screen performed its diving act, was mostlyflat to a little lower. The softness tended to be a bit morepronounced on Appalachian and Rockies pipes, where declines wereoften around a nickel. A producer was at a loss to explain whyTrunkline saw dips of nearly a dime in its East Louisiana pool andabout a nickel in its East and West Louisiana pools while otherLouisiana pipes were down barely 1-2 cents at most. “There justdon’t seem to be as many buyers on that pipe as there used to be,”he said.

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