Physical natural gas prices overall averaged a little over a penny higher on Friday for weekend and Monday gas deliveries. Midcontinent prices fluctuated from flat to a penny or two higher, and deliveries to Rocky Mountain points were able to climb about a penny higher.

Marcellus constrained points recorded the biggest gains but still languished below $2. At the close of futures trading September had shed 6.7 cents to $3.230 and October was down 6.4 cents to $3.257. September crude oil added a stout $2.57 to $105.97/bbl.

A Rocky Mountain producer sees rising prices, but "it's going to be a dead-cat bounce. We've got terrible storage reports coming." According to the producer, Hurricane Isaac last year was responsible for the loss of 40 Bcf. "Say 20 Bcf for two weeks, and if there is no hurricane this year you can tack on 20 Bcf to upcoming storage reports. In addition, you've got production that's about 1.5 Bcf/d higher than last year, so that's another 10 Bcf per week.

"On top of that, Bentek says you are losing 7 Bcf/d to coal in the power market. I can make a case for sub-$3 in a month, but you know there will be a bounce in here somewhere, a hurricane threat or something like that. Everyone is getting too comfortable being bearish, I think," the producer said.

The producer may take some solace in updated hurricane forecasts from the National Oceanic and Atmospheric Administration (NOAA). The first two months of the 2013 Atlantic hurricane season have been relatively quiet, but the peak mid-August through October portion of the season remains on track for above-normal tropical storm activity (see Daily GPIAug. 9).

"Our confidence for an above-normal season is still high because the predicted atmospheric and oceanic conditions that are favorable for storm development have materialized," said Gerry Bell, lead seasonal hurricane forecaster at NOAA's Climate Prediction Center. "Also, two of the four named storms to date formed in the deep tropical Atlantic, which historically is an indicator of an active season."

In an updated Atlantic hurricane season outlook released Thursday, NOAA forecasters said they expect a total of 13-19 named storms to form in the Atlantic Basin this year, including six to nine hurricanes, three to five of them major (Category 3 or higher). That's down marginally from NOAA's initial tropical forecast of 13-20 named storms, including seven to 11 hurricanes, three to six of them major (see Daily GPIMay 24).

Gas for weekend and Monday delivery on the CIG Mainline added a penny to $3.04, and deliveries to Opal were flat at $3.11. At the Cheyenne Hub, gas was seen at $3.12 , up a penny, and on Northwest Pipeline Wyoming deliveries came in at $3.02, also a penny higher. Gas at El Paso non-Bondad finished at $3.11, down 2 cents.

In the Midcontinent, weekend and Monday parcels added about a penny. Gas tendered at Northern Natural Gas Ventura rose by 2 cents to $3.31, and at Demarcation gas changed hands at $3.29, unchanged. On NGPL Midcontinent, gas came in at $3.19, up two cents, and on NGPL's Amarillo Line gas was seen at $3.28, up a penny. Deliveries to OGT eased 2 cents to $3.12, and on Panhandle Eastern weekend and Monday gas was quoted at $3.12, unchanged.

Weekend and Monday gas prices at capacity-constrained points in the Marcellus took big jumps, but from suppressed levels. Weekend and Monday gas on Tennessee Zone 4 Marcellus bounded higher by 30 cents to $1.52, and deliveries on Transco-Leidy Line jumped 37 cents to $1.58. At Marcellus station 315, Tennessee reported on its website only 28,910 Dth/d available out of design capacity of 1,360,000 Dth/d and at station 314 no additional capacity was available out of capacity of 904,000 Dth/d.

Futures traders look for continued weakness. "I think we are headed to $3.05 to $3.10 by the middle of next week. I think we'll get a little flush once we get below the lows of this week," said a New York floor trader.

Of late this market has been weather-driven, and although changes to forecasts over a weekend can often provide a surprise on Monday morning, forecasters don't see that happening this weekend. Forecasts are little changed. MDA Weather Services in its morning six- to 10-day outlook shows below-normal temperatures east of a vast arc extending from North Dakota to Georgia to Maine. A fairway of above-normal temperatures extends from South Texas across the Continental Divide to Washington.

"Some small cool tweaks are present in the East, though, but the pattern itself is still quite similar to [Thursday] overall. This region and most of the Midwest will stay on the cooler side of normal while under an upper-level trough. Heat is mostly limited to the Southwest within this period as even Texas is anticipated to moderate towards normal by this time. The West Coast should stay within a few degrees to either side of normal, with little threat of strong heat or cold. With changes only to the details and models in reasonable good agreement, confidence is unchanged at moderate to high," the forecaster said.

"The European models still offer more cool risk in the East late next week [and] model risk is mixed along the West Coast, but recent trends point to cool risk outweighing warm."

Traders, however, saw enough uncertainty in the weather outlook to suggest that the market Friday wasn't about to give up Thursday's gains. "Since shifts in the temperature forecasts or storm activity aren't exhibiting much change, we are attributing much of [Thursday's] 5% rebound off of the lows to speculative short-covering," said Jim Ritterbusch of Ritterbusch and Associates.

 "It would appear that the noncommercial accounts were looking to accept partial profits out of a sizable short holding on fresh price lows in [Thursday's] trade regardless of the storage figure. Although initial bearish response to the storage number was quite aggressive, knowledge that the supply figure was influenced by reclassification within the West Coast region spurred a strong rebound that gathered momentum when the market was able to push back into the plus column. The market appears unlikely to relinquish much of yesterday's gains today ahead of a weekend that could bring some changes in the temperature views."