While some points were able to log increases for the entire week, deals done on Friday for weekend and Monday delivery included some upticks, some that did not change and quite a few that recorded declines. The Northeast, Midcontinent, Rockies and California recorded the most drops, with declines ranging from a penny to 6 cents.

While a number of points in Texas, the Gulf Coast and the Midwest were able to squeak out increases of a few pennies, declines won the day. After four days of mostly higher quotes nationwide, some traders had been forecasting the letdown would occur on Friday ahead of the weekend (see Daily GPI, May 14).

“While a fair amount of points down around the Gulf Coast and in a few other places remained unchanged or recorded modest increases, most market locations headed in the other direction. It does not really come as any big surprise,” said a Northeast trader. “After four solid days higher of increasing averages, I think it’s only normal for a little steam to be released ahead of the weekend. I think we saw the same thing in the futures market.”

Partially countering Thursday’s 5.5-cent gain on Thursday, the June natural gas futures contract on Friday gave back 2.7 cents to close at $4.312. Make no mistake, the week as a whole was still significantly bullish. The June contract added a net 29.7 cents over the five-day period.

The weekly increase was also apparent in the cash market After averaging $3.94 for the week ending May 7, the Henry Hub on Friday averaged $4.27.

Tradition Energy analyst Addison Armstrong said Thursday’s new eight-week high in natural gas futures of $4.414 highlighted the fact that the gas market continues to focus on the upcoming cooling and hurricane seasons and signs of improving economic conditions. However, he noted that it cannot be dismissed that storage surpassed the 2 Tcf level at the earliest time of the year ever.

“Last week’s storage injection of 94 Bcf increased the total amount of gas in storage to a new record level for a first week of May to 2.089 Tcf, further highlighting the glut of gas that currently overhangs the market,” he said. “Storage levels are above the five-year average max for a fourth consecutive week. Although last week’s injection kept current storage levels at a record level for this time of year, the surplus against last year remained the same from last week’s level of 97 Bcf (4.9%) while the surplus against the five-year average rose slightly to 325 Bcf (18.4%).”

The temperature outlook remains mixed, he added. “Weather forecasts continue to indicate mostly normal temperatures in the Midwest and Northeast sections of the country in the next 10 days and then a gradual warm up to above average temps across most the eastern half of the country in the 11-15 day forecast period. But there remains a slight chance that temperatures will be cooler than projected at the end of this month and the beginning of next month.”

©Copyright 2010Intelligence Press Inc. All rights reserved. The preceding news reportmay not be republished or redistributed, in whole or in part, in anyform, without prior written consent of Intelligence Press, Inc.