Prices were mixed Wednesday, but lower again in most cases. A screen plunge of nearly 40 cents the day before clearly outweighed rising cooling load in some areas in vying to be the primary cash market influence. Continued concern about the potential for running out of storage injection space later this summer or fall also contributed to overall cash softness.

The West and Northeast contained most of the points that were flat to about a nickel higher. Otherwise, losses ranged from a couple of pennies to about 15 cents.

An 8.6-cent advance by July futures Wednesday will give more of the cash market a fighting chance at rallying Thursday, especially if power generation demand for running air conditioners continues to grow, according to one source.

Summer is "officially" under way now, and it's starting to feel like it again in several regions. Northeast highs are predicted to rise into the mid to upper 80s Thursday, with New York City likely to peak around 88 degrees. The South will top out in the 90s from the Carolinas to the southern Plains, and in fact, "the mercury may approach the century mark over parched areas of middle Georgia and southern Alabama," The Weather Channel (TWC) said.

The Midwest, where most points dropped a little more than a dime, will have a cool front system attracting hot and humid surface air that will cause cooling stormy weather over the next few days, TWC said. The lower end of the region may remain warm, but north of the front highs are due to range from the pleasant 70s to the low 80s.

The Pacific Northwest and Rockies also will be fairly mild in the 70s, but a warming trend has begun in much of the West. As is often the case, triple-digit highs will bake the desert Southwest, Great Basin and inland California, TWC said.

A Midcontinent producer reported that OGT was cutting his nominations because of high operating pressures created by dwindling storage injection capacity. "Southern Star [Central] is where the gas is," he said, but it can't get it into the Oklahoma intrastate because of the high pressure.

In another symptom of this year's fast-filling storage, Questar lowered injection capacity into its Clay Basin facility Wednesday (see Transportation Notes).

It's very hot again in the Midcontinent and air conditioning load is returning, the producer continued. He believes the strong oil market is keeping gas prices from sinking too much; otherwise they would be significantly lower by now, he said. Another supportive factor for gas numbers is that processing plants are "making a lot more money off [natural gas] liquids," to the point that if producers aren't providing enough gas to keep liquids volumes high, the processors will buy supply for themselves.

In yet another "final report" of Gulf of Mexico shut-in statistics related to Hurricanes Katrina and Rita, the Minerals Management Service (MMS) said gas that remained off-line had taken a big drop to 935.67 MMcf/d as of Monday. That was 162.58 MMcf/d less than it reported on June 5 in a previous "final report" (see Daily GPI, June 6). MMS repeated a sentence from the June 5 announcement in saying, "In the last month there has been substantial improvement in the production numbers warranting another release so a decision was made to issue a final report after Hurricanes Katrina and Rita."

Cumulative deferred production since Aug. 26, 2005 now totals 803.604 Bcf, equivalent to 22.017% of the Gulf normal annual output of about 3.65 Tcf. Sixty-eight platforms remain evacuated, MMS said. Since the 2006 hurricane season is under way, MMS said future news releases will show oil and gas "production" statistics rather than "shut-in" statistics. "The numbers and percentages will reflect how much production is flowing instead of how much is shut in," the federal agency added.

Jim Osten of Global Insight expects a 74 Bcf injection to be reported for the week ending June 16. He also projected a smaller build of 70 Bcf for the week ending June 23, saying, "The National Weather Service is forecasting well above normal CDDs [cooling degree days] in all regions this week, with CDDs for the nation as a whole expected to average 36% above normal."

Reuters news service said its survey of 21 industry players found an average expectation of a 77 Bcf injection in Thursday's storage report. The range of estimates was 68-87 Bcf, it added.

©Copyright 2006 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.