Prices were mixed but mostly softer Wednesday as some relief from inferno-like heat indexes will be spreading Thursday through the Midwest and arriving later in the Northeast.

There were a few scattered instances of flatness amid overall losses ranging from 2-3 cents to more than half a dollar. The West tended to see most of the larger declines. The minority gains, which were concentrated at Northeast citygates and several Gulf Coast points, ran as high as nearly 60 cents at Tennessee Zone 6.

The Gulf Coast was rather puzzling, with most of its trading points joining in Wednesday’s general softness, but several of them (mostly in Louisiana and Alabama/Mississippi) continuing to record strong price upticks. Transco (all production-area points except Station 30 in South Texas), Southern Natural Gas, Tennessee Line 500, Florida Gas Zone 3 and Trunkline-West Louisiana were up 20 cents or more.

Florida Gas Zone 3 was fairly easy to explain after the pipeline tightened the tolerance on a market-area Overage Alert Day (see Transportation Notices). And Tennessee declared an OFO setting a 2% tolerance and $5/Dth penalties for negative imbalances (see Transportation Notes).

To one marketer, “it’s a case of where the weather is” behind the Gulf Coast’s pockets of strength. Transco St. 65 is kind of a “swing location” that tends to be the most easily transported and most liquid point in the region when gas loads are strong, he said, adding, “Anybody who can use Transco will.” Also, some traders often take gas off Transco in Zones 3 and 4 (mostly Zone 4) to move it into Southern, he said. But when Northeast demand is so high that most Transco supplies move on to the market area, that leaves less gas available to transfer into Southern, he concluded.

And a Gulf Coast producer who trades the Northeast said Tennessee restrictions in the producing area and the OFO are his “biggest pipeline headache right now.” A bunch of little ones are all adding up to one big restriction, he said.

Tropical Storm Chris grew slightly weaker Wednesday but was still expected to be upgraded to a hurricane eventually. At 5 p.m. AST its center was about 115 miles north-northeast of St. Thomas and headed west-northwest at nearly 10 mph.

There’s a very good chance that platform evacuations and production shut-ins will be starting Monday in the eastern and central Gulf of Mexico. Unless the storm (almost certainly due to be a hurricane by then) makes a radical change of course, it will have cleared Cuba and the Florida Keys by early that afternoon and be pointed straight at the eastern Gulf, according to the “five-day cone” of projected tracking by the National Hurricane Center.

As expected, several power grids continued to set new records for demand (see story in Power Market Today). The New York Independent System Operator was typical, saying in a press release, “The statewide demand for electricity reached a record for the second day in a row — and for the third time in two weeks — Wednesday, as New Yorkers kept air conditioners humming and fans blowing to beat the heat and humidity of an unrelenting heat wave.”

Other than the anticipated break in temperatures coming to northern market areas, conditions will remain hot and humid in the South while western thermometer levels will be seasonable in most of the region.

Some excess supply issues were starting to arise again in the West as Kern River reported high linepack systemwide.

Chicago will be cooling off by about 10 degrees Thursday, a Houston-based marketer noted. Temperatures are falling in most of the Midwest, so it and the Midcontinent were both softer at all points Wednesday as a result, he said.

Thunderstorms will arrive late Thursday to cool off the Northeast, so lower temperatures Friday should be affecting Thursday’s market, said a producer. But in Wednesday’s trading for Thursday flows, regional power generation demand remained very strong since the cooldown won’t be arriving until late in the gas day. At 10 p.m. Tuesday night it was still 90 degrees in the New York City area, he said. “In Houston that’s not unusual, but there it’s unheard of.”

The producer thought that Chris’s alarmingly close following so far of the paths of Katrina and Rita were responsible for the screen’s rebound Wednesday. However, he didn’t think the futures advance of 22.5 cents would be enough to avert price softness in the Northeast Thursday with cooler temps due to lower power generation load Friday.

While acknowledging the stronger screen, a trader for several independent producers said she didn’t know why futures pulled back so much from their session high when the projected path of Chris is matching the Katrina/Rita paths so closely. She called the Tennessee OFO very stringent for receipt points. She considered it “amazing” that most Gulf Coast points were softer Wednesday, but a few were much higher again. She noted that Southern had said it was “too close to call” on whether it might issue an OFO Thursday.

The trader said she was getting “lots of calls” for supply from electric generators, adding that they must be running every gas peaking unit they have. If her company had been able to find more supply Wednesday, “we could have sold it easily,” she said.

Monday’s market ought to be super-strong with Chris expected to have cleared the Florida Keys by then, the trader continued. But of course, she added, it could always make a change of course that wouldn’t threaten offshore production, and then a softer market could be expected early next week.

The Reuters news service survey of 21 industry players found an average expectation of a 19 Bcf storage injection for the week ending July 28. The range of estimates was 5 Bcf to 35 Bcf, Reuters said.

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