Overall natural gas cash prices rose by 5 cents on average Wednesday as quotes were boosted by soaring eastern power prices and underlying forecasts of temperatures as much as 20 degrees above normal. Dollar-plus gains occurred at Northeast points and in the Mid-Atlantic, prices were well bid as well. Great Lakes and Midwest points were also firm. At expiration June futures had limped off the board losing 2.6 cents to $4.155, and July fell 4.0 cents to $4.184. July crude oil lost $1.88 to $93.13/bbl.

Next-day power prices surged at major eastern trading points. IntercontinentalExchange reported that next-day real-time power delivered to the New England Power Pool’s Massachusetts Hub rose by $27.37 to $73.47/MWh, and power delivered to the PJM West Hub jumped $37.07 to $100.26/MWh. Power at the New York Independent System Operator’s western delivery point (Zone A) gained a stout $19.25 to $62.50/MWh.

Underneath the surging power quotes were forecasts of soaring temperatures at major eastern cities. Forecaster Wunderground.com predicted Wednesday’s high in Boston of 75 would hit 84 on Thursday and 91 on Friday, well ahead of the seasonal average of 70. New York City was expected to see Wednesday’s 88 degree high ease slightly to 86 on Thursday and Friday, still well ahead of a normal 74. Philadelphia’s toasty 92 on Wednesday was forecast to moderate only to s91 on Thursday and Friday, 19 degrees above average.

The National Weather Service in suburban Philadelphia said “high pressure off the East Coast will continue to establish itself over the next few days while slowly moving out to sea through the weekend. A low pressure system will track into the Great Lakes region and push a cold front through by early next week. High pressure will fill back in behind the departing front.”

Deliveries to the Algonquin Citygates vaulted $1.32 to $5.79, and Thursday deliveries into Iroquois Waddington added a hefty 62 cents to $5.23. On Tennessee Zone 6 200 L, next-day packages came in at $5.78, up $1.23.

Further south, price increases were more modest. Gas into Dominion rose by 7 cents to $4.21, and deliveries to Tetco M-3 rose by 10 cents to $4.41. Gas headed for New York City on Transco Zone 6 added 22 cents to $4.59.

A Michigan marketer said they were buying about 80% of June requirements at index, but had to buy a small amount on Consumers Wednesday to balance out customers. “It looks like we don’t have an issue with Trunkline curtailments that we had last month,” the marketer said.

Deliveries on Alliance rose by 5 cents to $4.23, and quotes at the Chicago Citygates were up a penny at $4.20. Parcels delivered to ANR ML7 added 21 cents to $4.40, and gas on Michcon added 6 cents to $4.42. Quotes on Consumers were seen at $4.48, 3 cents higher, and deliveries at Dawn also rose by 3 cents to $4.54.

As the June futures expired Wednesday, Addison Armstrong of Tradition Energy said “gas prices have settled into the middle of the past month’s trading range after gyrating violently over the last couple of weeks between $3.883-4.444. Weather forecasts are little changed” from Tuesday, “with above-average temperatures expected across the East in the next five days followed by shift to below-normal temperatures during the first half of June. The upper tier of the Midwest and Northeast is expected to see normal to above-normal temps during the first half of next month.”

Some forecasters aren’t so sure about above-normal temperatures during the first half of June. “While some of the strongest heat of the season continues to show up in the East for the end of this week and into the weekend (mainly low 90s for the big cities, but we could see temperatures flirt with the mid 90s on Friday), the remainder of the forecast encompassing the six-15 day [outlook] looks rather benign, with seasonable to even cool temperatures at times,” said Commodity Weather Group President Matt Rogers. “Out West, California sees some stronger heat this weekend (some upper 90s for Sacramento on Saturday), but the heat retreats somewhat during the six-10 day. The 11-15 day still focuses heat mainly out in the western states and could even make a push toward the coast at times — though we remain cautious with this currently.”

Technical bears are hoping that when June futures peaked at $4.44 on the first of the month and subsequently declined to $3.883 on May 9, the wheels might be in motion to take the market on an extended Elliott Wave five-wave pattern lower. “If the $4.440-3.883 was only the initial leg down in a larger decline, then natgas should reverse lower by the $4.330-4.360 zone,” said United ICAP’s Walter Zimmermann in a weekly analysis for clients.

The bearish case, however, is far from certain. “Last week’s expected natgas rebound peaked right where a bear market rally should have peaked. Bears still have no case without a decisive close below the key $3.844 level.” Bulls, on the other hand, need to break above $4.324-4.361. “In between, we have a technical no-man’s land, so neither bulls nor bears are in control here.”

Bulls and bears will both have material to work with if estimates of the Energy Information Administration’s weekly inventory report are correct. Estimates fall above last year’s 72 Bcf build but less than the five-year average of 92 Bcf. IAF Advisors of Houston predicts a build of 85 Bcf, and a Reuters survey of 21 industry cognoscenti showed an average 88 Bcf with a range of 80 Bcf to 97 Bcf. Bentek Energy is expecting an 84 Bcf increase.

The hurricane season jumped ahead of the official June 1 date, at least in the eastern Pacific. Wednesday afternoon 75 mph Hurricane Barbara was moving across southwest Mexico and was expected to enter the extreme southwest Gulf as a remnant low Thursday.

©Copyright 2013Intelligence Press Inc. All rights reserved. The preceding news reportmay not be republished or redistributed, in whole or in part, in anyform, without prior written consent of Intelligence Press, Inc.