Prices continued to slide at most points Thursday under pressure from two previous days of futures weakness, excess supply issues in parts of the West and insufficient cooling demand to keep a floor under overall pricing.

Several flat to about a quarter higher points kept mixed price movement in play. Most of the firmer numbers were in the Northeast, where cooling load was starting to become significant with a forecast of a 90-degree high Friday in New York City.

A majority of the cash market saw losses ranging from 2-3 cents to about 65 cents. The greatest softness was concentrated in the West, particularly in the Rockies. A spell of very hot weather in the Rockies was proving to be short-lived as Denver’s high was expected to retreat into the mid 80s Friday after hitting about 96 Thursday.

In addition, PG&E extended a high-inventory OFO through at least Friday, and SoCalGas added one of its own for Friday. The SoCalGas e-mail notice of the OFO did not get sent until early afternoon, well after cash trading had ended for the day. Both the PG&E citygate and the Southern California border dropped about 35 cents.

Temperatures will rise further Friday in the Midwest and Northeast, with many locations approaching 90 degrees. The extra heat allowed some Northeast citygates to rise, while Midwest deliveries were held to flat to less than a dime lower.

After a brief cooldown Thursday, highs will rise slightly in the South Friday but will continue to be limited to the 80s in most sections east of the Mississippi River. Midcontinent prices were very weak despite peak temperatures around 100 expected Friday in Oklahoma City and Tulsa.

The Energy Information Administration’s report of a 90 Bcf addition to storage during the week ending June 20 was an exact match with consensus expectations. As Citi Futures Perspective analyst Tim Evans noted, the volume was “relatively neutral compared with the five-year average of 94 Bcf.” But another record-setting spike in Nymex’s crude oil trading pit carried the July natural gas contract along for the ride for an expiration-day advance of 32.5 cents (see related story).

Production was reduced early Thursday at Independence Hub in the deepwater Gulf of Mexico for about a day’s worth of routine maintenance, said Rick Rainey, spokesman for Enterprise Products Partners, the hub’s majority owner. He could not confirm news reports that volumes were cut to about 250 MMcf/d, but said flows were expected to return to normal sometime Friday morning. Platform output had returned to about 900 MMcf/d in mid-June after the discovery of a leak in the export pipeline in early April caused a shutdown that lasted a little more than two months (see Daily GPI, June 17). The total capacity of Independence Hub is 1 Bcf/d.

Having warned customers that it might become necessary, Florida Gas Transmission issued an Overage Alert Day Thursday (see Transportation Notes). Florida Gas Zones 2 and 3 in the production area were flat, but a drop of nearly a quarter was reported for the Florida citygate.

Yes, it’s still getting very hot in inland California, but it’s cool along the coast, said a western trader. The PG&E/SoCalGas OFOs were mainly due to end-of-month balancing, he said. Many customers’ supply positions tended to get long during the month, he explained, and now they’re trying to dump the extra gas into the distributors’ systems, and it’s more than the power generation load from inland heat can handle.

July will see much higher first-of-month indexes due both to screen strength during June and the fact that July is a high-demand month for power generation, the trader said.

Local weather is nice and consequently a Northeast LDC has very low load currently, said the utility’s fuel buyer. However, it’s quite a bit hotter closer to the Atlantic coast, he said. Despite Thursday’s hefty screen spike, the buyer thinks prices will be softer again Friday. He cited the loss of industrial load that accompanies a weekend market and noted that cash prices were moving lower in late trading Thursday.

An industrial end-user in the Lower Midwest, where temperatures were reaching the mid to upper 80s, said his wife told him she had started their home air conditioner Thursday for the first time this year. Bidweek was “uneventful” for the buyer. However, he did note that whereas his company had been seeing fairly strong premiums in index-based deals for baseload gas earlier this year, he had bought most of its July supplies at index flat, with “a little bit” at a small premium.

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