In a quiet weekend market prelude to the beginning of June bidweek, prices fell in mostly moderate amounts Friday. However, OFOs declared for Saturday by both of California’s huge distributors (see Transportation Notes) had an impact felt throughout much of the West, where all of the declines of more than 20 cents were recorded.

Permian/Waha quotes joined eastern markets in racking up losses ranging from about a nickel to nearly 20 cents, with most of them in the general vicinity of a dime. Sources attributed the bearishness to the usual dropoff in industrial load over a weekend and the fact that gradually rising temperatures across the southern tier of states and in much of the East weren’t expected to boost power generation demand substantially before early this week.

But the OFOs by PG&E and SoCalGas, along with mild to cool temperatures prevailing in most of the West outside the hot desert Southwest, caused significantly greater price erosion. Numbers in the California, Rockies, San Juan and Pacific Northwest markets dropped between a little less than 20 cents to nearly half a dollar.

Border quotes into SoCalGas led the West’s headlong plunge downhill. For whatever reason, PG&E citygates fell only about half as much as border-SoCal numbers despite PG&E’s OFO imbalance tolerance of 3% being considerably tighter than the 10% set by SoCalGas.

For a marketer in the Northeast, it was a “pretty dead weekend market.” He thought natural gas futures went from a negative position Friday morning to an eventual daily gain of 2.9 cents because of concern about weather forecasts for this week being revised to warmer than before, noting, “Traders didn’t want to get short on futures ahead of the weekend” after seeing news like that. The marketer said weather was starting to heat up in the Northeast, but not enough for a noticeable jump in power generation load to show up yet.

For a change June gas futures ran contrary to the influence of Nymex’s oil product contracts, which fell heavily on the news that Saudi Arabia planned to seek an increase of more than 2 million bbl/d in OPEC production. Crude for July (the new prompt month) fell 87 cents to $39.93/bbl, its first close below $40 in about two weeks.

Cities south of a weekend front in the Midwest would feel like it was July, according to The Weather Channel, while those north of the front would experience more typical May conditions. Only New England would be spared from hot and humid conditions in the Northeast, it added. The South was due to get more of a taste of summer heat than it has felt so far this spring.

One source said he was unaware of anybody getting very active in June business to this point, adding that traders wanted to wait until after the weekend when weather forecasts would be fresher and the screen would be closer to expiry.

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