Most cash points continued to decline on Thursday as the futures market dove further and the natural gas industry was forced to digest yet another larger than normal storage injection report.

The day’s action marked the fifth consecutive session where a vast majority of cash points recorded declines. Drops on Thursday were smaller across the country with declining points registering subtractions of less than a dime. Upticks were few and far between with a combined handful of points in the Midcontinent, Gulf Coast, Rockies and the West recording gains of a few pennies or less.

The market’s main guide continued to be the action in the natural gas futures arena. After dropping 6.2 cents on Wednesday the September natural gas futures contract provided more negative guidance for the cash market going into Friday’s trade by declining 14.3 cents Thursday to close at $3.336.

“There really wasn’t a whole lot going on Thursday. I think a lot of folks are taking their end of summer vacations,” said a Mid-Atlantic trader. “The business was slow and the downward pressure remained on cash points basically across the country.”

A Northeast buyer said his utility was following its normal strategy. “We are doing a little bit of buying everyday, which is according to plan,” he told NGI. “Prices have been very soft in the region as storage remains flush. Even the day’s storage report of a 63 Bcf build further solidified the fact that there is no lack of gas. One thing we’ve been noticing is that Canadian gas is becoming more competitively priced. From what I understand, their storage is even fuller, so eventually the price is going to have to come down.”

The Gulf Coast region absorbed more bearish news Thursday as Enterprise Product Partners LP announced it has found a workaround to its HIA-264 compressor complex in the Gulf of Mexico, which has been offline since last week due to damage from a fire (see Daily GPI, Aug. 6).

Enterprise said Thursday that its High Island Offshore System LLC (HIOS) is continuing a force majeure at its HIA-264 compressor complex, but it said that effective for gas day Thursday it is able to accept nominations and resume some level of service from all receipt locations to all delivery points by bypassing the damaged compressor station (see related story).

The storage report, which revealed that 63 Bcf was injected into underground stores for the week ending Aug. 7, could be deemed either bearish or bullish depending on one’s approach. While the injection fell short of most industry expectations, which were centered around a build in the high 60s, the actual injection was much larger than last year’s 51 Bcf build and a five-year average injection of 42 Bcf.

Citi Futures Perspective analyst Tim Evans said the 63 Bcf build came down on the supportive side even though he had been expecting a 62 Bcf build. “The 63 Bcf net injection was slightly below the consensus expectation and therefore mildly supportive in the sense that it could have been worse,” he said. “However, any support will be tempered by the fact the build was also well above the 42 Bcf five-year average.”

On the storm front, AccuWeather.com said it is tracking three separate systems. While two systems — Tropical Depression Two and an area of low pressure — are on an East Coast path, the third could have the Gulf of Mexico in its sights.

“A large tropical wave is moving westward through the eastern Caribbean,” said Brett Anderson, a senior meteorologist with AccuWeather.com. “The tropical wave will eventually get into the Gulf of Mexico by the weekend and will lead to a rapid increase in showers and thunderstorms over that region by Saturday. There is a small chance that this tropical wave could organize over the weekend as it drifts across the Gulf.”

The Northeast trader said he remained unimpressed by the storm chatter of the last few days. “Nothing looks strong enough to bring any problems at this time,” he said. “When real storm concerns begin to arise, the pipelines will send out notices of warning. We haven’t received any of those notices yet and hopefully it will stay that way.”

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