Deja vu? Similar to last Monday’s market, rising cash prices Friday derived much of their support from previous-day futures strength. They certainly weren’t getting much benefit from weather fundamentals. Although high temperatures in the 90s and above continued to reign from the western Gulf Coast through the Midcontinent, desert Southwest and Rockies into parts of the Upper Plains, those conditions were largely unchanged from Thursday. The key Midwest and Northeast market areas remain unusually mild for early August.

Advances ranged from a little under a dime to a little more than 30 cents and were spread fairly evenly throughout the geographic markets.

A Midwest utility buyer was among several sources saying they had no weekend deals to report. “Why do prices keep going higher when many of us aren’t buying gas?” he asked. His attitude was shared by a utility buyer in the Northeast who also did not trade anything Friday. She wondered what was holding prices up “with our weather staying so mild.” She guessed the Northeast price strength was primarily “because we have to compete for storage injections with power generators in the Gulf Coast.”

Another Northeast utility buyer said she wasn’t hearing of any deals for Monday only, when regional temperatures are supposed to be getting a little hotter, but hoped to be able to sell some intraday gas Monday if extra weather load does materialize. Northeast highs in the low 80s last week are expected to be about 5 degrees higher by the middle of this week, she said.

Early last week quite a bit of Midcontinent supply was moving south towards the Permian Basin to help meet air conditioning needs in the desert Southwest and intrastate Texas markets, a marketer said. But the flow direction was reversing as the weekend approached, he added. It’s not that Midwest load was growing appreciably, he said, but more likely that the Midcontinent had enough cooling demand itself to pull the Permian gas northward.

Texas heat was the main story for a marketer who sells to the intrastate market. Power generators in Texas were making “lots of calls for weekend gas” Friday, she said.

A Houston-based source took note of the South Texas Project 1 nuclear unit starting to ramp up operations again last week after being out of action for four months. The unit was at 13% power as of Friday, according to the Nuclear Regulatory Commission. After a refueling shutdown began in April, pipe corrosion found at the bottom of the reactor vessel led to officials anticipating that repairs would keep Unit 1 offline until late summer. At that time, the source said, the outage was expected to contribute hugely to a summer gas price spike since the 1,250 MW facility — equivalent to an estimated 275-300 MMcf/d of gas-fired generation — would be unavailable in a state known for its summer heat. Instead, prices that were above $6 at the Henry Hub and Houston Ship Channel in May had yielded to sub-$5 numbers in late July, he pointed out.

A western trader found it difficult to understand why Malin and the PG&E citygate were among the biggest gainers, pointing out that the utility was projecting a linepack increase to near its maximum target levels over the weekend.

“After the powerful jumps it made on Friday, cash has got plenty of room to come down [this] week,” commented a Midwest trader. “It is nice to see some volatility back in the game, even if prices are not going the way I would like them to. At least now I can see some action. Soon enough prices will start turning down my way.”

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