The end of a major supply constraint depressed Rockies/Pacific Northwest quotes, but the rest of the market added to Wednesday’s small gains with ones that often were slightly larger Thursday. A soaring natural gas screen following the storage report is expected to keep the general bullish streak going Friday, possibly even igniting a rebound in the Rockies.

A few non-Rockies points were flat to just a tad higher, especially at Northeast citygates and in California, but the majority achieved gains ranging from about a nickel to 15 cents. The Rockies and Pacific Northwest had a few points on either side of flat, but otherwise losses ran up to about 15 cents.

The Energy Information Administration’s report of 74 Bcf injected into storage last week fit within the range of previous expectations, albeit towards the lower end. When compared to the year-ago refill of 33 Bcf, the current volume whacked another 41 Bcf chunk out of the year-on-year deficit. However, Nymex traders must have seen a buy signal in the report, because they sent the September futures contract to an eventual daily gain of nearly 34 cents. In the process the screen broke above the key psychological level of $5.00. (The crude oil and heating oil contracts rallied from Wednesday’s loss due to a new bombing in Baghdad arousing fresh concerns about whether Iraq will be able to make a significant contribution to world supplies anytime in the near future; crude wound up on the plus side of $32/bbl again.)

A Canadian producer had a strong hint of higher weekend prices, quoting same-day intra-Alberta deals prior to the storage report from the mid C$5.40s to the mid C$5.50s, then recording a post-report sale in the mid $5.60s. In addition, she was hearing intraday Aeco numbers rising further to the high C$5.70s Thursday afternoon.

Traders in other markets also said prices were climbing in the few deals remaining to be done after the EIA spoke its piece. That helped create larger ranges Thursday, they said, and provided a bullish foundation for Friday’s activity.

A couple of cash sources mentioned that although the screen spike didn’t seem logical based on a seemingly neutral addition to storage, they figured that Nymex bulls were short in many cases and, as a Northeast trader put it, “looking for any excuse [for prices] to go higher.” A Southeast utility buyer had a similar observation: “Bulls were waiting for something — anything — to push the screen higher, and that [storage report] was all they needed.”

The Northeast trader added that he was surprised by the “ferocity” of the futures upturn, but not by its direction, having expected an advance. The trader said he was seeing “a bit of decent demand from utilities” in the Northeast Thursday despite little change in generally moderate temperatures. “A lot of cash players went into August short and it’s showing up now,” he said. The trader had another reason to anticipate a firm weekend market, saying the region is due to get some extra heat early next week.

Not everyone is convinced of a rising market Friday, though. “I’m curious how cash will play out tomorrow,” a western marketer commented. “Nymex is still going up, but weekend gas might not believe it. Utilities won’t want to pay this high if they don’t have to.”

Rockies traders, and the western market in general, had no reason to be surprised by Thursday’s softening. The Tuesday-Thursday Opal Plant maintenance that was taking as much as 600 MMcf/d off the market will no longer be in effect Friday.

Noting that it was her first purchase all week, a Florida utility buyer quoted Florida Gas Transmission Zone 3 in the low $4.80s. Echoing recent observations by other sources that the state has been getting rains almost every day this summer, the buyer joked that “we might have to start calling it the Rain State instead of the Sunshine State.” But she also cited a forecast indicating that rain will slacken in Florida next week, creating a good chance of air conditioning loads going up “and getting an Overage Alert Day notice from FGT” again.

Under the title “Sunless East to continue summer that never was,” New York City-based Weather 2000 offered this advisory: “For those looking for sun and heat across the eastern third of the nation, better to set your sights for possibilities in 2004. All measures of summer warmth (whether cumulative or spikes) have been absent for the May-August 2003 period, with no real signs of change. This isn’t a matter of differing shades of grey, we’re talking about once-in-30-years type coolness.”

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