Trading action quieted down Friday for natural gas futures as market participants opted to take a breather ahead of the weekend. With a small bit of demand added back into long-term weather forecasts, the July Nymex contract rose 1.3 cents to settle at $2.337/MMBtu. August rose less than a penny to $2.331. Spot gas prices softened amid light weekend demand, with the NGI Spot Gas National Avg. tumbling 9.5 cents to $1.905.

Although some warmer trends showed up in the latest weather data, a slow moving system was expected to track across the South and Southeast, holding temperatures in the 80s early this week, according to NatGasWeather. The Southwest into Texas were expected to remain very warm to hot with highs in the upper 80s to 100s, while the Northwest and the rest of the northern United States were expected to be rather comfortable.

Weather is slightly more supportive, and the balance data still looks rather strong, with power burns the tightest in a long time, according to the firm. “The issue we have is still whether or not we can trust the supply data we see, as the numbers don’t seem to add up in terms of these last two Energy Information Administration (EIA) reports.”

Indeed, the EIA shocked for the second week in a row with a reported storage injection that easily surpassed the majority of estimates by almost 10 Bcf. Compared to degree days and normal seasonality, the 119 Bcf injection was about 4.5 Bcf/d loose versus the five-year average, including an estimated 7 Bcf impact for the week due to the Memorial Day holiday, according to Genscape Inc.

Total power generation was up around 10 average gigawatt hours (AGWH) compared to the previous week. Nonthermal generation declined around 10 AGWH, while coal was up around 4 AGWH week/week. Gas was up around 16 AGWH for an estimated 2.8 Bcf/d more gas burn week/week, Genscape analysts Eric Fell and Margaret Jones said.

Given current fundamentals, Bespoke remains “slightly bullish,” as that’s the best guess the firm has based on the data it sees, and the risk of some modest warmer changes in the weather pattern. “But we have to lower confidence a little after a big miss two weeks in a row.”

Traders appeared to have less confidence in the direction of prices as well, with nearly 40,000 fewer prompt-month Nymex contracts traded on Friday compared to Thursday.

“While prices have bounced marginally since Thursday’s lows, bears remain solidly in control unless $2.50 were to be taken out on the summer strip, a decent amount of ground bulls would have to make up. The main question is how low prices will go before finding strong support,” NatGasWeather said.

The balance of summer (July-October) on the Nymex curve averaged $2.338 on Friday.

Looking ahead, market analysts point to increased liquefied natural gas (LNG) exports, softer year/year production growth and more exports to Mexico as likely market drivers for the rest of summer. On the LNG front, however, the timing of increased demand from Kinder Morgan Inc.’s (KMI) Elba Island liquefaction project remains unclear.

The first of 10 planned production trains was expected to be in service in May, but that deadline has slipped and the facility remains in the commissioning phase, according to KMI.

“We continue to work through the commissioning and start-up process on the first of 10 liquefaction units at Elba. A press release will be issued once it is in service. Our expectations for placing units two through 10 in service will be provided after the first unit is in service,” KMI spokesman Katherine Hill said Friday in an email to NGI.

Permian Basin spot gas prices remained on the upswing Friday despite an otherwise overwhelmingly bearish cash market. While most other regions saw declines of up to 20 cents or so, West Texas tacked on a few more cents to this week’s gains.

Waha edged up 3.5 cents to average $1.005, with the highest-priced deals reported at $1.35.

Elsewhere in the Lone Star State, cash prices slipped a few cents. Houston Ship Channel dropped a nickel to average $2.34.

Steeper declines were seen in the Midcontinent, where Southern Star plunged 33.5 cents to $1.755. Midwest prices also softened, although declines were limited to a dime at the majority of pricing hubs.

The news Friday that the United States would not impose tariffs on Mexican goods was met with relief from the energy industry on both sides of the border, where any trade war would have been certain to hurt the bi-lateral energy business.

Tariffs would have hit U.S. refiners, who import about 600,000 b/d of crude from Mexico. Energy is also one of the areas where the United States has a trade surplus with Mexico, and any tariffs would have been met with retaliatory tariffs. Mexico meanwhile depends on the United States for about 90% of its domestic natural gas needs.

After nine days of threatening duties that would quickly rise from 5% to 25%, U.S. President Donald Trump said that he had reached an agreement with his Mexican counterpart Andrés Manuel López Obrador on Friday based on assurances that Mexico would deploy its National Guard to deter migrants from entering the United States.

In Mexico, it was an important respite following a week of bad news. On Thursday, Fitch Ratings followed its rating downgrade of Mexico by downgrading state oil company Petróleos Mexicanos (Pemex), reducing its debt to junk status. Moody’s Investors Service also followed its sovereign change by downgrading its outlook on the state oil giant from stable to negative.

In addition, Moody’s downgraded the outlook on state pipeline operator Cenagas and state power company Comisión Federal de Electricidad (CFE) from stable to negative.