Weather load is getting more benign in general, but the South is starting to heat up.

Cash prices had still been mostly flat to higher a day earlier, but the market bowed to bearish influences with declines across the board Wednesday as weather-based load continued to diminish and flooding-related Louisiana shut-ins remained relatively small.

Second-day repetitions of flat numbers into Southern Star Central and OGT in the Midcontinent, along with about a nickel rise at Iroquois Zone 2, were the only exceptions to losses everywhere else ranging from 2-3 cents to about 15 cents. Most of the declines were in single digits.

June futures, which had experienced a sizeable downturn Tuesday following three trading days of gains, is giving essentially neutral guidance to Thursday’s cash after rebounding by a scant 1.6 cents (see related story).

The Louisiana Department of Natural Resources (DNR) said Wednesday 166 out of 592 (28%) of the producing oil and gas wells located in the potential flooding inundation area of South Louisiana from opening gates at the Morganza Spillway had been reported shut in, up from 122 wells Monday. The latest tally includes 117 out of 124 (94%) of producing wells within the Atchafalaya Basin, which lies directly in the path of the spillway flooding. Estimated shut-in production as of Wednesday morning was 31.05 MMcf/d of gas and 3,695.9 b/d of oil or condensate, said DNR spokeswoman Anna Dearmon.

Moderate to cool temperatures dominate the outlooks for the Midwest and Northeast, so there is little heating load remaining in those two key market areas. The South may be on the verge of contributing a substantial amount of cooling load, but for the time being temperatures are just beginning to peak in the low 80s Thursday in much of the region, which will result in only a nominal number of air conditioners being turned on. Texas and Florida are the exceptions, with some sections of each state forecast to see highs on either side of 90.

Moderate to cool conditions are dominating the West, with even the normally hot Phoenix area forecast to reach only the high 70s Thursday and Alberta temperatures expected to bottom out no lower than the mid 40s.

Even though the Houston-area trend was for warming temperatures starting to reach 90 going into the weekend, Houston Ship Channel quotes dropped nearly a dime while volumes traded on IntercontinentalExchange (ICE) shrank from 345,400 MMBtu Tuesday to 242,200 MMBtu Wednesday.

Although the Chicago citygate fell even further by a little more than a dime, its ICE activity increased a bit from 670,600 MMBtu to 688,400 MMBtu.

Northern Natural Gas indicated the warming trend in the Upper Midwest, saying its system was just under its normal system-weighted temperature of 60 Wednesday, but the average was projected to rise to 62 Thursday, 65 Friday and 68 Saturday.

A marketer suspected that part of the Northeast’s double-digit price upticks Monday — despite merely cool forecasts — was due to less restoration of nuclear generation in the region than had been expected. However, the Seabrook plant is supposed to come back online in the next day or two, he said, although the Pilgrim plant is still down for an indeterminate time.

Another bullish factor for the Northeast market is a bit of supply tightness from the combination of an ongoing outage of the Canaport LNG facility in New Brunswick through the end of the month and recent sendout of regasified LNG from the Distrigas terminal in Massachusetts being relatively low, the marketer continued. However, with more moderate weather continuing to build in the Northeast, those supplies are not needed all that much, he said.

He expects prices to keep getting softer going into the weekend but considered it something of a toss-up about chances for a modest rally early next week.

Noting that news of the Bonneville Power Administration deciding to partially limit the output of non-hydroelectric energy in the Pacific Northwest temporarily (see related story) “sounds grim” for Rockies prices, a regional producer nevertheless said the western U.S. and Western Canada have storage levels that are well below those of a year ago, “so there will be homes for some of the displaced gas at least for a while.”

Citi Futures Perspective’s Tim Evans was on the high side of expectations when he projected a storage injection of 95 Bcf being reported for the week ending May 13. He went on to estimate builds of 88 Bcf, 107 Bcf and 104 Bcf for the weeks ending May 20, May 27 and June 3, respectively.

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