Prior-day futures strength, in which the July contract rose a stout 14.8 cents, was able to offset some forecast declines of cooling load in a couple of key market areas in keeping most points flat to slightly higher Wednesday.

Losses ranging from 2-3 cents to about 20 cents were largest in the Northeast, where peak temperatures on either side of 90 emerging from the holiday weekend were predicted to drop into the low to mid 80s in such lower Northeast locations as New York City and Philadelphia and even to the mid 60s in upper New England.

Unchanged quotes were common throughout the rest of the cash market, but no gains got any larger than about a nickel.

July futures will have modestly negative guidance for the cash market Thursday after dropping 3.7 cents (see related story) following the previous day’s large gain.

Showing up right on schedule for Wednesday’s official start of the 2011 Atlantic hurricane season (see related story), a small low-pressure area just to the east of Daytona Beach, FL, Wednesday afternoon was moving to the west-southwest at nearly 20 mph, the National Hurricane Center (NHC) said. The agency downgraded the system’s chance of becoming a tropical cyclone named Arlene within the succeeding 48 hours from 30% that morning to 20% in the afternoon. It was expected to move over northern Florida later in the day, likely bringing locally heavy rainfall and gusty winds to parts of the Florida peninsula.

NHC also said it was monitoring disorganized cloudiness and showers associated with a broad surface trough over the southwestern and west-central Caribbean Sea, but it considered this system to have even less chance (10%) of becoming a tropical cyclone.

Citi Futures Perspective’s Tim Evans said the market seemed to be reading the low-pressure area news “correctly in our view” as mostly “a rain event that might cool temperatures in the Southeast, rather than a more material threat to natural gas production off the Louisiana coast.”

Besides the Northeast, the Midwest is another region that will see some heat buildup over the weekend being squelched. After reaching the mid 80s Tuesday, Chicago can expect a retreat into the low 70s Thursday. However, even with the cooldown, citygate quotes were flat Wednesday.

The South will continue to experience fairly strong demand for air conditioning, though, as highs in the mid to upper 90s (and even a few low 100s in South Texas) will still be dominating most of the region as far west as Oklahoma and Texas.

Other than warm to hot temperatures remaining in parts of the desert Southwest and Rockies, most of the West will still be cool to chilly from the Southern California coast northward through Western Canada.

Going into the Memorial Day weekend, Florida Gas Transmission (FGT) was cautioning market-area customers of a potential Underage Alert Day because of milder forecasts for Florida. Despite the low-pressure area’s approach from the Atlantic, conditions obviously have changed since then, as FGT said Wednesday it possibly could issue an Overage Alert Day due to lower linepack and highs in the 90s being predicted for Florida. Numbers into all three production-area FGT zones were flat.

A one-week outage of the Jackson Prairie storage facility that began Wednesday (see Daily GPI, May 27) leaves Northwest Pipeline shippers temporarily without that outlet for placing their gas during what is likely to be a low-demand cool period in the Pacific Northwest. Northwest-domestic quotes were flat, but IntercontinentalExchange said volumes traded Northwest-Wyoming on its platform shrank by more than half from 101,200 MMBtu Tuesday to 34,500 MMBtu Wednesday.

Westcoast was reporting high system linepack, but its Station 2 trading location still managed to remain flat.

Credit Suisse analysts Hugh Li and Stefan Revielle anticipate a 90 Bcf storage injection being reported for the week ending May 27, which they said would be on par with last year’s comparable 90 Bcf build but below the 99 Bcf five-year average.

Stephen Smith of Stephen Smith Energy Associates looks for an injection of 88 Bcf, which he said is down from his original estimate of 93 Bcf. IAF Advisors’ Kyle Cooper also reported an estimate of 88 Bcf.

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