As expected, declining cooling load, a bearish storage report, the previous day's drop of a little more than a quarter by July futures and the reduced industrial demand associated with a weekend ganged up on the cash market Friday to push prices lower by sizeable amounts at all points. Several OFOs or similar actions and excess supply constraints exacerbated the situation in the West, resulting in plunges of about a dollar or slightly more at some locations in the region.

The across-the-board losses broke a string of mixed price movement that had begun about three weeks earlier in which at least one point each day varied from overall market direction. Declines ranged from about C20 cents (Westcoast Station 2) to about $1.05.

Heat around 90 degrees Friday in the Northeast proved fleeting, as the forecast for New York City called for a high around 80 Saturday and Boston was due to check in with a cool 69-degree peak. Saturday temperatures would be similarly moderate in the Midwest, coastal California and the Pacific Northwest. The Rockies area was due to warm up a bit, but only the desert Southwest, where Phoenix was expected to return to 100-degree-plus mercury levels Saturday, would be seriously hot.

Besides the desert southwest, the South as far west as Texas and Oklahoma constituted the only significant source of power generation load for air conditioning use, and even that region's highs would be capped in the low 90s over the weekend.

Besides high-linepack OFOs by both PG&E and SoCalGas and a "hold to burn notice" by Southwest Gas (see Transportation Notes), western prices were depressed by Kern River reporting high linepack systemwide Friday. And El Paso got in on the act with a warning to shippers of the "potential for a high-linepack condition" during the weekend with the pipeline's Washington Ranch storage facility at maximum injection and linepack at about 7.6 Bcf. "If the situation fails to improve, declaration of a Pack SOC [Strained Operating Condition] may be required," El Paso said.

The California OFOs and the high-linepack situation on El Paso had the greatest impact on the pipeline's two San Juan Basin pools and at the Southern California border, all of which barely exceeded a dollar in losses. The effect on the PG&E citygate and Malin was considerably lighter as they fell by about 55 cents and 45 cents, respectively.

SunTrust Robinson Humphrey/the Gerdes Group noted that Henry Hub's nickel gain to an average of $7.88 Thursday resulted in a Hub premium of about a nickel to July futures, which was the first time since late April that cash prices had traded above the prompt-month contract. It was a one-day phenomenon, though, as Henry Hub's loss of about 35 cents Friday left it nearly 15 cents behind the screen.

Reinforcing earlier predictions of a hot summer in the works, AccuWeather meteorologist Joe Bastardi said air conditioners will be "getting a workout" in most parts of the U.S. (see related story).

However, currently it looks as if air conditioning load for gas has disappeared for the most part, a Houston-based marketer commented. Based on July futures shedding another 16.2 cents Friday, he concluded that weather outlooks and the screen are not especially conducive to price rallies early this week. Maybe forecasts of well-above-normal temperatures in the Midwest will allow higher prices later on, but then you'll have the weekend factor approaching again, he said.

The marketer said he didn't see any significant transport or supply issues in the East to match those of the West. Florida Gas Transmission did implement an Overage Alert Day again, but at very a lenient tolerance of 25% (for negative imbalances, as opposed to the California utilities' restrictions on positive imbalances). Any scheduler who can't handle a 25% tolerance should quit the business, he said.

Southern Natural Gas said Friday afternoon it was "too close to call" on whether it would issue a Type 6 OFO for long imbalances on either Saturday or Sunday.

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