Moderate softness at some points in the Midwest and West was mixed into an overall market Wednesday that was flat to a little more than a dime higher. Rainstorms in much of the East were helping to dampen hotter weather that had been increasing power generation load earlier in the week, and cooler temperatures were moving southward into the Rockies, relieving some of the cooling load in that region as well.

However, a natural gas futures rise of nearly 20 cents, along with sunnier conditions starting to arrive in the East, should make the slowdown in this week’s bull run temporary in many markets, an East Coast utility buyer said. “Following the screen” should be in vogue for cash again Thursday, he said, although he was unable to explain the gas futures strength since Nymex’s crude oil and heating oil contracts were only barely higher despite government reports of inventory increases that were below expectations.

A southward-moving cold front in the Midwest and Plains regions was leaving highs in the 70s in its wake instead of the 80s that preceded its arrival. But the South is expected to start heating up again after another day of widespread precipitation Thursday.

Continuations of an OFO-like restriction on El Paso and the Palo Verde nuclear plant outage were the main stories in the West, a marketer said. Since those events were bullish in nature, she suspected that cooler weather in the Rockies was responsible for the mostly modest declines at several western points. Also, because Palo Verde could be ramping up again by Friday, traders may have anticipated the resulting decrease in electric utility demand for gas, she said. Otherwise the market will stay fairly routine market until major heat starts arriving, the marketer added.

Due to rising linepack, NOVA changed its imbalance tolerances to 0/-4 Wednesday although Westcoast, its neighbor to the west, maintained a range of 20% pack and zero draft because of low linepack. According to a note by Citigroup analyst Kyle Cooper, NOVA linepack was expected to end Wednesday’s gas day at 14.304 Bcf, 461 MMcf above the pipeline’s target level. Intra-Alberta quotes were flat.

A Northeast utility buyer observed that because of his company’s adherence to a preset storage injection schedule, he was losing some cash market arbitrage opportunities. “We have to keep gas at certain spots during the summer to maintain injections, so that limits our ability to sell at spot A and buy at spot B” or vice versa, he said. Area weather has gotten warmer but remains within normal early-summer ranges, he said. Marveling at Northeast citygates starting to top $7 again, he said, “And that’s with no weather. Imagine where the market might go” when normal summer heat hits the South and the northern market areas. Also, traders have yet to see any significant activity in what’s expected to be a busy hurricane season, he noted.

For the July 21-25 workweek, the National Weather Service predicts above normal temperatures in the Pacific Northwest and the Southeast, along with South Texas. Below normal readings are expected in the Northeast, Midwest, eastern Upper Plains and a large chunk of the desert Southwest.

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