The previous day’s screen weakness, along with a dearth of weather-related load outside the interior West and western portions of the South, were cited as Wednesday’s chief swing price depressants. Except for flat to substantially higher numbers for a few Rockies points, San Juan Basin and Southern California border, quotes fell by anywhere from about a nickel to a quarter Wednesday. Losses in the teens were most common.

One source also mentioned that expectations of taking another bite out of the year-on-year storage deficit when the Energy Information Administration issues its report Thursday morning probably enhanced the bearishness a bit. Prior guesses about last week’s injection center around 90 Bcf but have gone as high as 100 Bcf. Such volumes would compare with a year-ago figure of 72 Bcf.

Traders in several market areas reported moderate upticks in late pricing. Cash business finished too early to be influenced by an eventual June futures expiration-day gain of nearly a nickel after the screen had spent the morning in negative territory. But an East Coast utility buyer said the last-minute screen surge was a surprise following Tuesday’s dive of 20 cents-plus. “I guess there’s just too much interest in $6 gas for it to go away,” he said.

Temperatures in the Northeast and Midwest continue to be unseasonably cool even with summer approaching, and there’s little prospect for much warm-up there before the weekend, according to The Weather Channel. The South is gradually building towards highs in the 90s and the boost in power generation demand that would entail, but sources agreed that until the northern market areas start making their own air conditioning contributions, the overall market outlook will remain somewhat bearish.

As one utility buyer commented, “They’ve got air conditioning rising in the South while we’re still heating our swimming pools in the Midwest.”

“We’ve sure got a lot of cooling load” in the Southwest already, said a regional utility buyer. Late San Juan Basin prices got above $5 after being as low as the $4.80s earlier, he said.

Several sources concurred that June bidweek activity was picking up quite a bit Wednesday afternoon after being very subdued previously. Thus far trading has not been as heavy as usual compared to a typical bidweek midpoint, said a western utility buyer. “The market got a late start for this bidweek since so few traders were around at the end of last week. It’s going to be more condensed. I expect volumes and activity to be strong though this coming Friday.”

A Midwest trader who also remarked on a general lack of deals prior to Wednesday said, “For a change I’ve been doing more calling than getting called.”

There was a “little more slide, but nothing really significant,” in bidweek prices Wednesday, particularly in the market area, said a Gulf Coast/Northeast marketer.

A western buyer reported San Juan-Bondad purchases discounted from index by 3-6 cents.

“North American weather regime locked in as West sizzles and East chills,” was the heading on an advisory Wednesday by New York City-based Weather 2000. “At the same time that the eastern third of the nation is contending with March-like temperatures, the western third is dominated by warm, dry weather 6-12 degrees above normal. The current pattern since mid-April for the East and since mid-May for the West could not have matched our research conclusions and CDD-season projections better: there is minimal variation, exception or indications of flux on the horizon.

“To place this weather in quantitative perspective, here are some city examples in the epicenter of their respective patterns: New York City, which is supposed to reach the mid-70s, had four of the past six days (during the holiday weekend) only reach 56 degrees! Phoenix, which everyone feared would have a cool summer and which is supposed to be in the mid-90s, has broken 100 degrees the last 12 consecutive days (one of the days was 99)!

“The only big variable to contend with is not the weather, but rather perspective and psychology. When patterns are so dominant, consistent and repetitive, human forecasters are bound to get anxious and antsy for change. You couple that with computer models having a mathematical tendency to mean-revert several days out, and what you are left with is a crying wolf syndrome we’ve seen the last month (and this past winter). Human forecasters will then continuously call out, ‘I see heat in the East beyond 10 days…,’ only to be disappointed by the dominance set forth by the spring and summer North American tele-connections. If you keep calling for “heat down the road” week after week, eventually you’ll be right (there of course will be at least one week this summer that will in fact be warm for the East).”

“…Now suppose New York experiences a few days that average out reaching the low 70s in the coming week (average high being the mid 70s). A 15-degree increase will be perceived as a huge warm-up, when in fact, the temperatures are still averaging out cool and below normal for that time of year. In other words, there will be slow variations and undulations, swinging from record-cold to seasonable, but persistent above normal temperatures have not, and will not, be seen in the eastern third [of the U.S.].”

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