Most of the cash market was able to rally Friday, spurred primarily by the previous day’s 29.4-cent rebound by August futures and to some extent by forecasts of slightly higher heat levels during the weekend in the South, Northeast and Pacific Northwest. The overall move higher defied cooling trends in the Midwest, Rockies and inland California and the loss of industrial load that occurs during a weekend.

Price movement remained mixed as a few western points were flat to down a little more than 20 cents. The gains ranged from 2-3 cents to a little more than 35 cents; outside the Rockies all of them were in double digits.

Monday’s cash market will have highly negative guidance from the screen’s downturn of 39.6 cents Friday. The August natural gas contract was in positive territory in early activity, but then began a dive in spite of another record-setting performance by August crude oil, which exceeded $147/bbl at one point.

The California market traded one high-linepack OFO for another. PG&E allowed its Friday OFO to expire Saturday, but SoCalGas issued one of its own for Saturday (see Transportation Notes). Interior California temperatures, which had peaked in the low 110s at one point last week, were due to fall to around 100 or less Saturday. The Southern California border recorded one of Friday’s biggest losses, while the PG&E citygate rose about a quarter.

Tennessee prices rose in both the production and market ares despite the pipeline warning shippers systemwide that due to high linepack and storage levels, it had little ability to absorb positive imbalances. It urged them to match physical flow with scheduled quantities to avoid the possibility of an OFO.

Florida Gas Transmission kept its Overage Alert Day in place through its fourth day Friday, and Florida Gas Zone 3 and the Florida citygate, which had softened in spite of the constraint for the two previous days, were buoyed by Thursday’s futures rally into increases of about 30 cents and a quarter, respectively.

The Midwest could expect “a strong July cold front” to slice through it from the Great Lakes to the mid-Mississippi Valley Saturday, The Weather Channel said. Chicago, which was expected to see a high of 94 Friday, would see a drop of about 11 degrees Saturday, according to Madison, WI-based Weather Central. However, a Midwest warm-up is predicted to begin Monday.

It was the opposite situation in the Northeast. While southern sections of the region would only see small heat increases, the impact would be greater in New England. For example, Weather Central predicted that Burlington, VT, highs would go from the mid 70s Friday to nearly 90 Saturday.

The already sultry South was forecast to see increases of one to three degrees at most locations during the weekend.

A Midcontinent producer said prices started near their highs but came down a lot as trading proceeded, especially on Panhandle Eastern. It was good to be an early seller, he said, noting that he was able to put a package into Panhandle Eastern at $9.97 near the top end of its range.

In spite of Friday’s overall gains, the producer said there was plenty of supply available. He reported getting more calls from people wanting to sell gas to him than people wanting to buy his company’s gas. He said he was unable to find any intrastate Oklahoma buyers even with highs in the mid 90s continuing in the Sooner State, so he sold into the interstate pipes instead.

The producer said he thought Oklahoma’s power generators, rather than burning new gas purchases, relied on a forecast of no major heat through the end of July and were pulling from storage, figuring to replace it at lower prices later this month. He also noted that the state’s hydroelectric supplies are remaining strong. “These are still high prices,” he said, and the Oklahoma Corporation Commission “is watching the utility generators like a hawk, so they have to be careful about their fuel purchases.”

The general temperature forecast for the coming week is rather moderate, the producer said, and with August futures taking a dive Friday, cash quotes should be falling Monday.

SunTrust Robinson Humphrey/the Gerdes Group made a preliminary forecast of a 90-95 Bcf storage injection for the week ending July 9, saying that would be “well above the 77 Bcf long-term injection principally due to lower industrial demand attributable to the July 4th holiday.”

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