Light weather-based demand kept cash prices falling at nearly all points Friday as forecasts of slightly higher heat levels in the South and Midcontinent were offset by a continuation of moderate-to-cool springtime conditions in most other regions. The weekend decline of industrial load was another bearish factor, while as expected, the previous day’s 4.4-cent gain by July futures had essentially no impact on the physical market.

A modest rise of a little less than a nickel by the MichCon citygate and flat quotes for Texas Eastern-East Louisiana and the Houston Ship Channel were the exceptions to overall drops ranging from 2-3 cents to about a quarter. Most of the larger dips occurred in the West.

The screen will have modestly positive guidance for cash traders again Monday after prompt-month futures rose another 5.8 cents Friday (see related story), but given what is expected to be a continuing lack of serious weather fundamentals, it is doubtful that a cash rally will result.

PG&E suspended a systemwide high-inventory for only one day Friday, issuing another one scheduled to take effect Saturday (see Transportation Notes), and the PG&E citygate saw one of Friday’s largest downturns as a result. PG&E citygate volumes on IntercontinentalExchange (ICE) had changed almost imperceptibly during the previous two days (from 736,100 MMBtu Wednesday when an OFO was still in effect to 735,200 MMBtu Thursday when no OFO was set for Friday). But they shrank for the weekend as only 703,800 MMBtu exchanged hands on ICE Friday.

In another reflection of excess supply issues returning in the West, NOVA said there was potential for an imbalance tolerance change on its system Friday due to high linepack.

Highs were due to start approaching 90 or so at more locations in the South over the weekend, and a similar warming trend extended into the Midcontinent. However, the marginal additions to cooling load obviously had no positive impact on prices.

Temperature trends were reversing from Friday in the Midwest and Northeast, with the Midwest expected to start cooling again Saturday and the Northeast getting warmer. The overall impact was little changed from the last week or two, though: mild to cool conditions in both regions that contributed almost nothing to the gas market in either heating or cooling demand.

Other than modest warm-ups approaching in the Rockies and Western Canada, the West’s weather picture was mostly static with moderate conditions continuing to dominate. Even the desert Southwest was retreating from highs in the 100s as recently as Thursday to the low 90s.

The Northern Natural Gas bulletin board indicated the moderate extent of chill returning to the Upper Midwest. A posting Friday said the normal system weighted temperature at this time of year is 65 degrees, but it projected averages of 55 Saturday, 58 Sunday and 57 Monday.

A Midwestern marketer said she was not aware of any constraints on the MichCon system that would have caused the citygate’s small gain Friday to go against the overall softer market grain. However, she noted that until earlier this year MichCon deliveries used to be a little cheaper than into Consumers Energy, but MichCon has been pricier than Consumers in recent months dating back to March.

Hopefully spring is here to stay for a while in the Midwest, the marketer said, adding that weather was “glorious” in her area Friday. It doesn’t look any colder for the next couple of weeks than a high in the lower 60s Sunday, she said. She hopes it doesn’t turn any colder than that again until next fall, but ruefully acknowledged that “you never can tell” with Midwest weather.

There’s virtually no weather demand to be found in the West, said a regional trader, who observed that it was cooler than usual in interior California and the desert Southwest. Noting the return of PG&E’s high-inventory OFO, he said western markets seem to be in “an OFO-plagued period” right now. He sees no new price strength on the horizon, saying it looks like the same low-demand weather will stick around for the next couple of weeks.

The Baker Hughes Rotary Rig Count (https://intelligencepress.com/features/bakerhughes/) said the decline of drilling rigs searching for gas in the U.S. slowed to only three rigs lost during the week ending June 5. For a change the Gulf of Mexico suffered the most losses, with all three of the week’s lost rigs departing its waters and none being deactivated onshore. The latest Baker Hughes tally of 700 active rigs was down 4% from a month ago and 53% less than the year-ago level.

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