Reports of rising power generation load for gas as spring temperatures continue to go up were spotty Tuesday, but there apparently was enough demand to prompt moderate spot price firmness in the face of major weakness in the energy futures complex the day before.

Quotes ranged from flat to about 15 cents higher nearly across the board Tuesday. The sole exception was a small loss of less than a nickel for El Paso-San Juan (Blanco), where softness related to a big constraint on Transwestern’s lateral in the basin reasserted itself following a Monday rebound that had mystified at least one western trader.

The cash market was expected to continue strengthening Wednesday due both to warmer weather persisting in some areas and on the basis of a soaring recovery among Nymex’s energy products. The natural gas contract’s rise of 20.2 cents was attributed chiefly to soaring numbers in the nearby crude oil, heating oil and unleaded gasoline trading pits. June crude hit $40.15/bbl, its highest prompt level since Oct. 12, 1990 when Iraq’s occupation of Kuwait was causing preparations for the first Persian Gulf war, before eventually settling at $40.06.

Crude’s spike of $1.13 Tuesday more than wiped out Monday’s dollar loss. In addition to an attack on an Iraqi pipeline that reportedly cut the troubled nation’s oil exports by 25%, crude traders also were reported to be having new doubts about whether Saudi Arabia will be able to effectively increase production by the Organization of Petroleum Exporting Countries, where 10 members bound by quotas were believed to have produced 2 million bbl/d over their cumulative limits during April.

One source commented that energy futures had made a huge turnaround “just after it looked like the plunge was starting.”

A Northeast LDC buyer said he usually detects increases in power generation load by the buying interest at Transco’s Zone 6 citygate pools, and some of it was occurring Tuesday as regional highs reached the 80s with a new warm front expected in the lower Northeast Wednesday. The spreads were good between various pricing points, he said, so there were no problems covering variable costs of transportation. “We’re selling off system supply and replacing it elsewhere,” the buyer continued. Also, he was still seeing fairly steady storage buying “by us and other utilities,” who pretty much are required to inject steadily to avoid scoldings from state regulators if something should go wrong later.

However, a marketer said that while Texas utilities were still buying some gas, the intrastate pipelines appeared to be flush with supply. He was puzzled by the strength of intrastate Texas prices because “there’s still not that much air conditioning load built up” with rainstorms keeping much of eastern Texas cooled off.

Cooling load in the Lone Star State was also dampened by the Comanche Peak 1 nuke being back to full operation for all practical purposes, he said (the unit was reported at 89% power Tuesday by the Nuclear Regulatory Commission in the Power Reactor Status Report maintained by NGI‘s Power Market Today at https://intelligencepress.com/subscribers/power/nrc/.)

Waha, which was up 6 cents on the day, started higher and moved down Tuesday, contrary to its usual tendency over the last week or so, the marketer added.

A Midwest trader said temperatures were mild there Tuesday but supposed to be about 8 degrees above normal for the next three days, then return to a coolish 70 around Saturday, so it was hard to get a gauge on how appreciably cooling demand for gas might be picking up.

But only a day after a utility buyer in Florida had commented about Florida Gas Transmission’s cessation of notices warning of “potential” Overage Alert Day notices, the pipeline was at it again Tuesday, saying rising temperatures in the Sunshine State could prompt a notice to keep linepack from falling to excessively low levels. Dime-plus upticks in FGT’s Zone 2 and Zone 3 pools in Louisiana were among the Gulf Coast’s largest.

And don’t get the idea that heating load has disappeared from the market scene. Cold fronts were expected to produce a chilly Wednesday from the Pacific Northwest through the northern sections of the Rockies and Plains states into the Upper Midwest. However, outside of the northern Rockies, much of the West will experience a gradual warm-up as the week goes on, according to The Weather Channel.

The National Weather Service sees mostly warmer weather for the May 17-21 workweek. South Texas is the only area where it predicted below normal temperatures, while above normal readings were expected for most of the eastern half of the U.S. excluding South Louisiana and peninsular Florida, and for most of the West from the Rockies westward but excluding Washington state, northern Idaho and Montana.

Citigroup analyst Kyle Cooper’s final estimation for this week’s storage report looks for an injection between 76 and 86 Bcf, which would compare with builds of 64 Bcf a year ago and 71 Bcf in the five-year average. A marketer reported that New York City-based PIRA Energy Group expects a 75 Bcf injection to be announced this week, in line with most guesses, but it anticipates a big jump in next week’s report to 111 Bcf.

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