With most of a widespread heat wave not due to arrive until after the weekend and continued prior-day negative guidance from July futures, cash prices fell again Friday at nearly all points. The typical weekend loss of industrial load and California OFOs contributed to the overall bearishness.

Flat to a little more than 20 cents higher numbers at a few points in the Rockies and Midcontinent made it a five-for-five week of mixed pricing. A large majority of Friday's losses that ranged from 2-3 cents to about 40 cents were in double digits. Except for the relative firmness of the Rockies market, the amount of decline was spread fairly evenly among geographic regions.

The market's overall softness occurred despite temperatures expected to rise in some areas over the weekend. The northern Plains, northern Mississippi Valley, Great Lakes, Ohio Valley and Southeast would be growing hotter Saturday and Sunday, according to The Weather Channel. But in the key market areas of the Northeast and Midwest, highs would continue to peak in the relatively comfortable area of 80 degrees for a while longer.

Hot weather in the Rockies (Denver was forecast to see a high of 96 Saturday) continued to buoy that market somewhat. But other locations in the West were depressed by high-linepack OFOs issued by both of California's big distributors (see Transportation Notes).

Largely due to the lifting of a northbound flow constraint, Northwest-South of Green River was up a little more than 20 cents and Northwest-domestic fell less than a nickel. The pipeline said it would end a Declared Deficiency Period and restore the Lava Hot Springs Compressor Station to normal design capacity Saturday (see Transportation Notes).

The Midcontinent has been "inundated" with rain recently, so the hydropower situation is strong, said a regional producer. It was the wettest spring on record in Oklahoma, he added. But with temperatures in the area starting to inch up into the low 90s, gas demand will stay fairly strong, he said, attributing the intrastate OGT drop of less than a nickel as largely due to rising heat levels.

The producer said he was puzzled about why Panhandle Eastern continues to trade at a substantial discount to the rest of the Midcontinent (it was nearly half a dollar under OGT Friday). "Is that going to last all summer?" he asked rhetorically. He suspects that one reason for the Panhandle weakness is Cheyenne Plains supplanting Panhandle supplies with gas from the Rockies.

He expressed surprise about July futures continuing to fall another 21.8 cents Friday, saying, "Aren't they seeing the forecasts for major heat next week?" He said he has seen little getting done by most traders for the July bidweek, but more next-month business should start kicking in Monday. However, the producer said his company has already placed most of its gas for July, adding that it tends to sell everything at index throughout the summer months.

A Calgary-based producer also was surprised at the screen weakness, saying he "certainly" thought Nymex traders would have seen the approaching heat wave and not wanted to be short over the weekend. Chicago temperatures are starting to edge higher, but 60s readings at night are taking the edge off of the heat and dampening gas demand at the citygate, he said. July basis is tightening a bit (getting less negative), he continued, reporting that he was hearing Chicago basis numbers Friday at minus 12-10 cents.

Areas along the West Coast will remain pretty cool in the coming week, but inland California will be heating up along with the rest of the nation, said a western source. With prices falling most of last week, some of his company's customers wanted to lock in July baseload or term gas, but others said they could afford to wait, he said. He was hearing reports of Southern California border pricing in the $6.50-70 range for July.

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