Thursday physical natural gas prices rebounded in Wednesday trading with sharp contrasts in largely weather-driven markets. Eastern markets faced double-digit declines as weather conditions were forecast to moderate, but extreme heat and high power loads in California and the western United States sent prices higher by as much as a half dollar in some locations. The NGI National Spot Gas Average gained 2 cents to $2.66.

Futures prices tried to recover from an 8-cent shellacking Monday — prompted by forecasts of moderate cooling — but failed miserably. At the close August had fallen 11.1 cents to $2.840 and September was off 11.6 cents to $2.837. August crude oil fell $1.94 to $45.13/bbl.

Forecasts for major eastern locales called for no better than normal temperatures with some cooling. Forecaster Wunderground.com predicted the high Wednesday in Boston of 82 degrees would hold Thursday before sliding Friday to 71, 10 degrees below normal. New York City’s Wednesday high of 84 was predicted to decline to 78 Thursday before rebounding to 84 Friday, the seasonal average.

Gas at the Algonquin Citygate dropped 42 cents to $2.23 and packages on Iroquois Waddington came in 26 cents less at $2.65. Deliveries to Tennessee Zone 6 200 L shed 39 cents to $2.21 and gas bound for New York City on Transco Zone 6 skidded 29 cents to $2.23.

The National Weather Service in southeast Massachusetts reported that high pressure will slowly drift east of the region late Wednesday into Thursday. “The greatest risk for some showers and isolated thunderstorms will be Thursday night into Friday, and this will be followed by mainly dry and warm weather this weekend with lowering humidity.”

Out west high next-day power loads and prices helped elevate next-day gas. Intercontinental Exchange reported that on-peak Thursday power at Mid-Columbia jumped $11.63 to $48.79/MWh and power at COB soared $14.00 to $54.50/MWh. At SP-15 on-peak power vaulted $15.30 to $57.45/MWh.

The California Independent System Operator (CAISO) predicted Wednesday’s peak load of 38,554 MW would soar to 42,896 MW Thursday.

Rockies and California next-day gas jumped. Deliveries to Opal added 19 cents to $2.63 and gas priced at the PG&E Citygate rose 9 cents to $3.15. Gas at the SoCal Citygate vaulted 50 cents to $3.35, and packages priced at the SoCal Border Average rose 38 cents to $2.92.

Otherwise price advances were more nominal. Gas at the Chicago Citygate added 8 cents to $2.75 and deliveries to the Henry Hub lost 4 cents to $2.90. Gas at Northern Natural Demarcation added a dime to $2.71 but gas on El Paso Permian jumped 21 cents to $2.65.

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Futures traders are not optimistic. “I think the lean is still down,” a New York floor trader told NGI. Traders see no need to buy the market back and feel there is more room on the downside.

“I think the market will work lower and look for support at $2.74 to $2.76, but it really looks like it will bottom in the $2.60s.”

Futures started out on a strong note by opening a penny higher at $2.96 as the market tried to reset following Monday’s weather-driven pummeling and traders began to focus on modest near-term cooling.

Forecasters are calling for a cooling trend which started with Monday’s model runs and prompted an 8 cent August futures adjustment. “[Wednesday’s] six to 10 day period forecast is cooler than yesterday’s forecast across the northern United States and warmer across the southern states, as well as the Pacific Northwest,” said WSI Corp. in a morning report to clients.

Continental United States (CONUS) population-weighted cooling degree days “are down 0.7 to 61.4 for the period, which are 6.5 above normal. Forecast confidence is only near average today as medium range models have been somewhat inconsistent with the details, but are in moderate agreement with the evolution of the large scale pattern over the CONUS.”

Analysts have adjusted their storage figures accordingly. Tim Evans of Citi Futures Perspective had calculated a 118 Bcf year-on-five-year storage surplus by July 21, but the revised weather outlooks prompted an adjustment to 130 Bcf.

The broader decline in the year-on-five-year surplus “normally translates into rising prices over the intermediate term,” said Evans.

“In time we think this will lift prices to test failed technical support in the $3.25 area or revisit the may high for August futures at $3.50 if warmer than normal readings persist.”

Evans is looking for a build of 68 Bcf in Friday’s storage report, delayed one day by the holiday.

In its Early View survey of storage expectations The Desk sampled 14 traders and analysts and the average came in at 63 Bcf, greater than last year’s 38 Bcf and about in line with the five-year average of 66 Bcf. The range on the survey was from 52 Bcf to 70 Bcf.