Physical prices were off by a couple of cents Friday with weakness at some Northeast and California points being offset by strength in the Midcontinent and elsewhere. Futures settled higher as traders squared books ahead of the weekend, and at the close April had risen by 4.7 cents to $2.326 and May had had gained 1.6 cents to $2.436. April crude oil jumped $1.95 to $107.06/bbl.

West Coast traders attributed market weakness to an operational flow order (OFO) issued by Pacific Gas and Electric. “There was a cycle I and cycle III OFO, and I think there is too much gas coming in,” said a southern California trader.

Traders are finding some attractive differentials such that physical gas (summer months) can be purchased and stored for later sales. “People are bringing the gas in for a couple of reasons, but you can now park gas for $1 from summer to winter, and that is what is bringing the gas in,” he said. The trader wasn’t specific on the contracts used, but April-December futures show a stout $1.029 spread based on Friday’s settlement.

Monday deliveries to SoCal Border and SoCal Citygate dropped about a dime. Farther north, Malin was off a couple of pennies and PG&E Citygate shed a couple of cents as well.

Quotes at Midcontinent points rose as high temperatures over the weekend were forecast to hold near the point where air conditioning load could be expected to kick in. AccuWeather.com predicted the high in Oklahoma City of 84 Friday would fall slightly to 82 on Saturday and Sunday. The normal high in Oklahoma City this time of year is 62.

Panhandle rose close a couple of pennies and Oklahoma Gas Transmission was up by just less than a nickel. Quotes on ANR SW were higher by a nickel.

Eastern marketers told of some weather-driven trading opportunities on northeast pipes. “There’s a pretty big differential between Canadian weather and weather in the Boston-New York area,” said a Houston-based marketer. “It looked like Quebec was going to warm up for the weekend, but not nearly as much as Boston. We had the transportation so what we were doing is buying the gas on Tennessee Zone 6 200 L at about $2.17 and sending it up to Iroquois Waddington at $2.56. That’s been a big windfall for us.”

Prices at eastern points were generally lower but quite varied. Algonquin Citygate and Tennessee Zone 6 200 L were lower by about a dime, but deliveries into Iroquois Waddington rose by almost a nickel.

Transco Zone 6 and Tetco M-3 parcels slipped by a couple of pennies apiece.

Tom Saal, vice president at INTL Hencorp Futures in Miami, in his work with Market Profile noted that Friday’s futures trading generated what is known as a rare “non-trend day.” The significance is that non-trend days represent horizontal periods, which are destined to be followed by periods of vertical (up or down) price movement.

The timing of the vertical movement is not predicted by Market Profile, but Saal did say that Friday’s value area of $2.327 to $2.305 in the April contract represented Monday’s trading objective and although the timing of when value areas are tested is not precise, “typically they are tested the next day.”

Other analysts are looking for continued weather-driven price weakness. “Although this market managed to advance marginally off of a seemingly supportive storage figure [Thursday], lack of upside price follow-through is again apparent, and we are anticipating fresh price lows within the next couple of sessions,” said Jim Ritterbusch of Ritterbusch and Associates. He sees the price environment as one in which “a bearish temperature factor is refusing to budge with above-normal temperatures still expected across a wide swath of the country into month’s end. While deviations from normal are showing some moderation within the 11-15 day views, any price support off of this shift is expected to be minimal, he said.

Weather forecasters are starting to show some moderation in the more distant time frames. Commodity Weather Group in its 11- to 15-day outlook shows above- to much-above-normal temperatures east of a line from Idaho to West Texas and west of the Hudson River. This is a weaker forecast than its six- to 10-day outlook, which shows super-above-normal temperatures engulfing the Midwest, Ohio Valley and Northeast.

“The models are struggling in handling the future of an upper-level low feature that promises to drench Texas early next week. The latest trends are to lift the weakening feature up into the Midwest for the six- to 10-day,” said Matt Rogers, president of the firm.

Looking past the 11- to 15-day period, Rogers said, “[Thursday] night’s European weeklies were a bit slower in timing the cool-down, but they still show a gradual cooling trend (versus normal) over the next four weeks for the Central to eastern U.S.with suggestion of a cooler pattern in the East by week three and especially week four. The West should start trending warmer/drier too.”

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