A Gulf Coast producer couldn’t pinpoint any single factor behind a major price rebound Tuesday that included spikes of a dollar or more at a few Northeast citygates, but said it more likely was related to a combination of several relatively minor things. However, a marketer in the Lower Midwest saw one overriding reason for the sharp increases: more power generation load.

Only Westcoast Station 2 failed to advance by more than 30 cents, and many points were seeing increases around half a dollar or more. The cash price strength was most pronounced in the Northeast; otherwise, gains were spread fairly evenly among geographic market areas.

Even the Southern California border jumped nearly 60 cents despite SoCalGas extending a high-linepack OFO into its eighth straight day Wednesday. However, the excess supplies in western markets last week appeared to have moderated somewhat. Kern River, which had been reporting high linepack systemwide prior to the holiday weekend, said Tuesday all segments had normal linepack levels.

The Gulf Coast producer noted that although no blazing heat waves were in the forecast, cooling load has risen since last week in northern market areas and remains strong across the southern half of the U.S. And despite the screen drop of a nickel on the June contract’s expiration Friday, July futures were stronger in Access activity when cash traders came into their offices Tuesday morning after the holiday, he noted. Then the screen helped boost late cash deals by being up more than 15 cents in Nymex’s early open outcry session, he said (the new prompt-month contract, July, eventually ended the day down 3.1 cents in spite of sizeable increases by the petroleum products as traders were cautious in advance of a meeting by OPEC producers later this week in Caracas, Venezuela).

Then you had the larger than usual return of industrial load following a long weekend, the producer said, and end-of-month balancing of pipeline and utility accounts may have played a role in Tuesday’s cash strength.

The marketer reported seeing “a lot of make-up buying” to repay volumes that hadn’t been scheduled for the weekend but got taken anyway because it got hotter in the Midwest than expected. “I don’t know if everybody was sleeping Friday,” he said. With Chicago forecasts running to around 90 degrees, he said he asked several power generators that are regular customers if they didn’t want to buy some weekend gas and was told that they didn’t expect to run their gas-fired peaking units.

It was actually hotter during the weekend in his area than it was Tuesday, the marketer said.

He said his company had finished June business last week, but bidweek prices were moving higher Tuesday, according to some on-line quotes he saw. For example, Chicago was priced around $5.90 for June Tuesday morning, but he expects the citygate index to be between $5.75 and $5.80 based on numbers from the last half of last week. Tuesday’s trading volume was quite small and won’t contribute much to index calculations, he said.

The interior Northeast will be blanketed by warm, humid air Wednesday, with overall regional highs in the 70s and 80s, The Weather Channel (TWC) said. Similar temperatures are due in the Midwest, it added, and although much of the South will experience a bit of cooling from afternoon and evening storm activity, peak readings there will be in the 80s and 90s.

Western highs will be as low as the 50s in the northern Rockies and as much as “well over 100” in the desert Southwest, TWC said. Maximums in the 70s and 80s will prevail in the Great Basin, it said.

It will be a warm full first week of June for nearly all of the western and central thirds of the U.S. but moderate along the East Coast, according to the National Weather Service (NWS). In its forecast for the June 5-9 workweek, NWS looks for above normal temperatures nearly everywhere north and west of a line running east from West Texas through the state’s central section and southern Arkansas before turning north to the western edge of Michigan. The only exceptions where normal conditions are expected to prevail are in all of Washington state along with the northern tip of Idaho, the western half of Oregon and a thin sliver of coastal California as far south as the Los Angeles area. Below normal readings are due along the coast from Maine through Maryland; then the below normal area will widen to include most of the Southeast before becoming a coast-only condition along the Texas Gulf Coast, NWS said.

Ron Denhardt of Winchester, MA-based Strategic Energy & Economic Research projects a storage injection of 87 Bcf for the week ending May 26.

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