Thursday's cash market was almost a repeat of the one the day before, with few points straying more than a few pennies up or down from flat. Many were unchanged from Wednesday averages as retreating cooling load in the Northeast and Midwest reached a virtual tie with a modest prior-day futures advance in influencing cash numbers.

There was a slight bias to the upside overall. Gains ranged from a couple of pennies to a little less than 15 cents, while losses topped out around 20 cents. Only a couple of Northeast points and Questar in the Rockies moved a dime or more in either direction.

Friday is expected to see mostly softer prices as sources cited cooling trends in the northern market areas (and to a lesser degree in the Midcontinent/Plains states), a screen drop Thursday, and the usual weekend decline of industrial load. In addition, a Gulf Coast producer said Thursday's prices were off a few pennies in late trading, which often indicates the direction they will move on the following day.

The Energy Information Administration came close to matching prior expectations but was a little on the high side in estimating a 79 Bcf storage injection for the week ending June 16. Consensus estimates had centered around the mid 70s Bcf. Nymex traders had a moderately bearish response, sending the July gas contract 14.9 cents lower on the day, with selling by funds reportedly also contributing to the decline (see futures story).

Other than a modest warm-up in parts of the Pacific Northwest (Portland, OR's high around 73 degrees Thursday was forecast to be nearly 10 degrees higher in the low 90s Friday), little change is expected in mostly hot weather in the West and South. However, the warmer temperatures at midweek in the Northeast and Midwest are proving to be very short-lived. For example, Thursday highs in the mid 80s in Chicago and the high 80s in New York City are forecast to be followed by peak temperatures Friday of 77 and 83 Friday.

Power generation demand for Friday was coming off quite a bit in the Northeast, said a marketer who added that the region's rise in temperatures Thursday was "more of a heat ripple" than a heat wave. He had no doubt that prices will be lower Friday.

The Gulf Coast producer agreed with the prediction of overall softness, but allowed that a few points might be able to buck the trend. Cooling load in the South appeared to be holding fairly steady all week, he reported. There is a chance that a tropical disturbance just east of the Bahamas could move into Florida over the weekend, where its rain could cool the state off and probably depress Florida citygate and Florida Gas Transmission production area prices in the process, the producer went on. It also might induce FGT to lift an Overage Alert Day notice, which remained in effect for a third day Thursday.

Hub Flows: Thanks to a considerably milder early summer than last year in the Midwest, volumes at the MichCon citygate have dropped precipitously from a year earlier. June 2005 month-to-date deliveries averaged 738,000 MMBtu/d, while in the current month they are only averaging only 499,000 MMBtu/d, down 32%, according to analysis of pipeline flows by Bentek Energy (http://intelligencepress.com/features/bentek/). And the volumes are trending even lower, as nominations for Thursday flows at MichCon came to only 366,000 MMBtu/d, down 5% from the day before. (Flow data for MichCon and a number of other trading points will be updated Friday morning at the NGI website.)

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