In Wednesday's trading for flows on the first official day of hurricane season, prices gave back part of the big gains they had scored Tuesday. A 3.1-cent prior-day screen loss (which occurred after the cessation of Tuesday's cash trading, during which futures had been in positive territory) and minor losses of cooling load in some areas were chiefly responsible for the declines.

According to the National Hurricane Center, the 2006 season is beginning with no activity on the horizon at this point.

The losses ranged from a little more than a nickel to about 55 cents. The only exception to this softness was at Transco Zone 5, which improved by a nickel on very light trading volume. By comparison, the rest of the Northeast witnessed the largest price weakness on forecasts for a cool front to move in Thursday to take the edge off the region's recent flirtation with near-summerlike heat. Temperatures, which had already been reaching 100-degree-plus levels in the desert Southwest, are starting to rise in other parts of the West. Thursday highs in the 80s will reach as far north as sections of Montana, The Weather Channel (TWC) said.

Heavy rains in recent days have also cut into air conditioner use a bit in the western end of the South, although the eastern half of the region will continue to see highs mostly in the 80s and some occasional 90s. The Midwest also is getting a tad of heat relief from a slow-moving cold front that should stretch from Ohio to Missouri by late Thursday, TWC said.

Thursday will be the ninth day in a row that SoCalGas has had a high-linepack OFO in effect. One California trader speculated that this probably was close to a record OFO duration if not a record for the giant LDC, but not so, according to SoCalGas. It had issued high-linepack OFOs for 16 days in a row back in November 2004 due to excess receipts and high storage levels, a spokeswoman said.

Kern River, which as recently as last week had been experiencing systemwide high linepack, has seen quite a turnaround. The pipeline reported normal linepack in its farthest upstream segment Wednesday but low levels in the three others downstream.

A western source said he expects a 26.1-cent rebound by July futures Wednesday to be enough to spark a general rally in the cash market Thursday. The latest hurricane season update by Colorado State University researchers (see related story) basically reaffirmed what they had said before about an active season, so futures ran up because traders "hyped the hell out of it," he said.

A Dallas-based trader said it was dry in the area but a little bit cooler, so along with the heavy rains deluging southeast Texas recently, a little intrastate cooling demand has been added. However, "we're still not having any trouble placing gas," she said, reporting "plenty of calls for Thursday supply." She said she can see the potential for storage-caused shut-ins near the end of summer (see related story), but if a hot summer and a couple of storms come along, "all that shut-in talk will fly out the window." The trader noted that the first tropical storm name this year will be Alberto, "but I don't see him anywhere around right now."

A utility buyer in the South said his company bought "quite a lot" of June baseload due to lower prices, and it will be mostly targeted for storage injections. "We like where cash is now" compared to a few months ago, he added. The company is aware of wanting "to leave a hole" for more injections later this summer, when prices presumably could go still lower, he said. He noted that the winter-summer Nymex spread was tightening, saying it had been "over three bucks, but now is more like $2.80" or so.

Reuters news service said its survey of 19 industry players found an average storage injection estimate of 87 Bcf for the week ending May 26. The range was 76-100 Bcf, Reuters said.

Analyst Tim Evans of Citigroup predicted that a build of 85-95 Bcf will be reported.

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