Despite still having a fairly plentiful amount of cooling load outside the Northeast, Pacific Northwest and California coast, cash prices fell at most points Thursday. They succumbed to a 7.4-cent retreat by July futures a day earlier and the fact that only the South, desert Southwest and parts of inland California are due to see temperatures go above the 80s Friday.

Flat to nearly 45 cents higher numbers at several points preserved a new streak of mixed price movement that has prevailed since prices dropped across the board last Friday. The Rockies, which have gone from cool earlier in the week to highs around 80 degrees, recorded the largest increases as the regional market continues to recover from Tuesday's major price slide.

Thursday's majority losses ranged from 2-3 cents and tended to be biggest in the Gulf Coast and at Northeast citygates.

The Energy Information Administration fell short of consensus expectations in the high 90s Bcf by estimating a 92 Bcf addition to storage during the week ending June 8. Although the build was larger than the comparable year-ago and five-year average volumes (see futures story), Nymex traders chose to focus on it's being several Bcf less than most analysts had expected in sending the July natural gas contract 20 cents higher.

The positive screen guidance may be successful in rallying a few points Friday, but at least one source expects softening to continue in most of the market due to limited power generation demand and storage options, along with the decline of industrial load over a weekend.

The currently cool Northeast will get a rapid warm-up over the next three days, according to The Weather Channel. The South will remain hot through the weekend, but will then experience a moderate cool-down as a cold front moves in an easterly direction across the region early next week.

The Midwest, which had seen peak temperatures around 90 as recently as Wednesday, has retreated significantly from those levels, with Chicago and Detroit predicted to see highs in the upper 70s Friday.

PG&E is keeping a high-inventory OFO in place for a third day Friday and it tightened the imbalance tolerance modestly. The PG&E citygate and Malin, which had been flat Tuesday and nearly 20 cents higher Wednesday in spite of the OFO, saw some price-depressing effect Thursday but it was modest, as they each fell about a nickel.

It's no wonder that the Northeast was quite soft with temperatures 10-15 degrees below normal, said a regional marketer. He looks for the cash market to remain soft Friday, but said "much warmer" mercury levels next week should fuel a price recovery as power generation demand grows.

As usual, there are no transport problems on pipes to the Northeast at this time of year, the marketer said. However, it's kind of spotty on whether basis spreads allow a trader to cover variable transportation costs from the Gulf Coast to the Northeast, he said. "Sometimes you can," and then later in the same trading session prices may have moved enough that you can't, he added.

A trader representing several Gulf Coast independent producers said Thursday's activity was "very quiet," with his company making few sales. He perceived Columbia Gulf mainline, TGT Zone 1 and ANR-Southeast as the strongest-priced pipes amid overall market weakness. He noted that maintenance on TGT (see Daily GPI, June 12) was still stranding a lot of his clients' Zone 1 supplies.

The fuel buyer for a dual utility in the South said his company has several baseload packages coming out of Zone 1 and apparently not all suppliers connected to that pipe are being affected by the maintenance constraint because there have been no delivery interruptions. The weather has become warm and sunny, so the utility is experiencing pretty strong demand for power, he said, but it's not all that humid yet. The company is staying the course on its storage injection program, the buyer said. However, it's buying more gas targeted for storage now rather than later because the Nymex strip indicates that such gas will be more expensive in October.

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