Considering forecasts of weekend cooling trends in the Midwest and Rockies, it was hardly surprising that Thursday’s 24.3-cent dive by August futures was able to induce losses at all points in the cash market Friday. Naturally, the typical weekend drop of industrial load also played a part.

Nearly all of the declines ranged from a little less than a nickel to about 40 cents were in the teens and 20s and tended to be fairly evenly distributed among the various geographic market areas.

Despite Thursday’s negative futures signal, Monday’s cash market may get some support from prompt-month futures registering an advance of 14.5 cents Friday (see related story).

Cold fronts would keep most Midwest and Northeast temperatures subdued through the weekend, The Weather Channel (TWC) said. But much of the South was due to start seeing closer-to-normal highs ranging throughout the 90s. Meanwhile, air conditioners would continue testing power generation capacity from Texas and Oklahoma through inland California — and the Pacific Northwest will be adding some load of its own early next week. “Portland [OR], for instance, will rise from the low 90s Saturday to just over 100 by Tuesday,” TWC said. “Record highs are possible west of the Cascades.”

Despite forecasts of scorching highs on either side of 100 continuing into the weekend in its Northern and Central California service area, PG&E did not find it necessary to issue an OFO, projecting that linepack would remain comfortably around the middle of its desired volumes through Sunday. However, the projection also indicated that linepack would fall to just above its minimum target Monday.

Florida Gas Transmission extended an Overage Alert Day through at least Friday and tightened the imbalance tolerance from 20% to 15%, but that did not avert major production-area price losses into the pipe. Florida Gas Zone 2 numbers dropped about 30 cents, while the Florida citygate was down a little more than a nickel.

“Am I misreading today’s numbers?” a producer asked somewhat incredulously. “ICE [IntercontinentalExchange] is showing that gas price prices in Chicago and California are both higher than Henry Hub?” He was correct; ICE numbers showed Chicago barely ahead of the hub by a penny, but SoCal border/citygate quotes were a little more than a nickel higher and the PG&E citygate was at nearly a 30-cent premium.

It may be that the recent initiation of Rockies Express-East service through Lebanon, OH, is having a greater negative impact than before on Gulf Coast pricing, as Bentek Energy predicted earlier this year (see Daily GPI, Jan. 14).

Friday’s losses were “about where I expected,” said a Houston-based marketer, and he doesn’t expect much change in cash prices Monday, despite forecasts of modestly warmer temperatures in the Northeast early next week. He said a contact in Indianapolis told him the Lower Midwest was having the coolest July on record through late last week.

Contrary to the consistent “dry heat” claims of many people about Southwest temperatures during the summer, a utility buyer in the region said it’s actually been “wet heat” due to extensive rains in the last couple of days. He said he was “not complaining” about the big reductions in San Juan Basin prices Friday. His company is currently running about 300 Bcf/d in gas-fired generation load, which is essentially flat from a year ago, he said. That is partly due to no significant nuclear outages in the region currently. He also thinks the economic recession has bottomed out in the Southwest, and both power and gas demand should start growing there again in the latter half of 2009.

In another rare reversal of a downward trend through most of 2009 of gas-seeking drilling rigs, the Baker Hughes Rotary Rig Count said its tally of such rigs was up by 10 to 675 during the week ending July 24. One rig joined the Gulf of Mexico search and nine more were activated onshore, Baker Hughes said. Its latest count is 2% less than a month ago and down 57% from the year-ago level.

Tropical activity in the Atlantic Basin was nonexistent Friday, the National Hurricane Center said.

©Copyright 2009Intelligence Press Inc. All rights reserved. The preceding news reportmay not be republished or redistributed, in whole or in part, in anyform, without prior written consent of Intelligence Press, Inc.