There did not seem to be a lot of weather support except in much of the torrid desert Southwest, but mostly small price increases continued at a majority of points for a second day Wednesday. The cash market did have some positive guidance from the previous day’s 7.1-cent increase by prompt-month futures.

There were quite a few flat locations mixed into gains that, as on Tuesday, ran about as high as a dime. Losses of a little less than a nickel were rare.

July futures took back the same amount of support they had provided Tuesday for Wednesday’s gas market, dropping by 7.1 cents (see related story).

The Energy Information Administration (EIA) reported that gas-fired generation in the Pacific Northwest is down 68% this year compared to the first five months of 2010 due to a superabundance of hydropower. The big reduction of electricity produced from gas likely bodes weak summer prices for producers in the Rockies and Western Canada, especially since EIA anticipates enhanced hydropower supplies lasting until at least September (see related story).

Pipelines to the Northeast had mostly been acting to prevent negative imbalances earlier this month, but Transco indicated a change in that area by taking measures to limit positive imbalances (see Transportation Notes).

Florida Gas Transmission extended an Overage Alert Day through at least Wednesday and tightened the tolerance for negative daily imbalances in doing so (see Transportation Notes). Production-area points into the pipeline were flat to about a nickel higher.

Almost imperceptible warming trends were returning in the South, but even in Florida no part of the region was expected to surpass the low 90s Thursday. And the Houston area, which got a welcome thunderstorm, had a thermometer reading of 68 at mid-morning Wednesday, according to the CenterPoint bulletin board.

An overall Midwest cooldown was continuing, but except for a small loss at Emerson, regional prices were flat to higher. Even the Chicago citygate, where a 67 high was expected Thursday, was up about a nickel. Northeast forecasts were largely static, with New York City due to continue peaking around the relatively moderate 80 area and Boston limited to the high 60s.

Some air conditioning load may be resurfacing in the Rockies, with a 90 high predicted for Denver, and interior California will remain hot despite a cooling trend. Otherwise, except for heat in the desert Southwest, the rest of the West is mostly mild to cool.

A utility buyer in the South said the company is hitting its targets on adding to storage easily, having no difficulties with either supply or transportation. However, it will cut back quite a bit on injections next month because storage accounts should be close to 95% full then, he said. Generally, he finds that gas is cheaper in the first few months of injection season than in later ones, so the utility tends to buy most of its storage gas from April through June.

The utility may have to juggle supplies a bit during the Fourth of July weekend, which is usually its lowest demand period of the year, he said.

In line with the moderate price strength being shown in most of the market Tuesday and Wednesday, Bentek Energy’s U.S. Natural Gas Hub Flows chart found rising volumes Wednesday at 11 of the 23 trading points that it covers (three other locations had flat nominations). Three points had very large increases: Columbia Gas in Appalachia (TCO), up 324,000 MMBtu (11%); Opal, up 176,000 MMBtu (14%); and Texas Eastern M-3, up 162,000 MMBtu (9%). No locations saw declines of as much as 100,000 MMBtu, being led by the drop of 89,000 MMBtu (15%) at ANR-Louisiana.

Credit Suisse analysts Hugh Li and Stefan Revielle checked in with a 93 Bcf estimate of the storage injection they expect to be reported for the week ending June 17. Tim Evans of Citi Futures Perspective has one of the lower analyst expectations for Thursday’s EIA report, predicting an 82 Bcf build. Going further out, Evans anticipates additions of 76 Bcf for each of the weeks ending June 24 and July 1, and one of 71 Bcf in the week ending July 8.

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