Modest upticks in cash prices continued to prevail Thursday, but signs of a weakening market were evident. None of the gains were greater than 7-8 cents, and more points were seeing either flatness or lower numbers. The hot weather in the South and West that had lent a modicum of support to Wednesday’s prices was waning a bit, and the 7.2-cent screen gain on Wednesday may have been the only thing averting overall softness Thursday.

Sources said to count on solid declines throughout the market Friday as the usual weekend slump in industrial load would be mixed with the slacking off of cooling load and the belated effects of a 13.1-cent futures loss Thursday following a bearish storage report.

The Energy Information Administration said 108 Bcf was injected into storage last week. The volume handily exceeded the consensus of prior expectations and further enlarged the 2004 surpluses to both the year-ago and five-year average inventory levels (see related story).

The Northeast and Midwest had already been falling short of the previous week’s forecasts of above normal temperatures, and a cold front was starting to drag daily highs in some parts of the South from the 90s back into the 80s. However, the Midcontinent and southern Plains were expected to continue recording peaks in the 90s and occasionally the 100s Friday.

Plentiful rain is keeping conditions fairly mild in the Northeast, said a regional utility buyer. She added the caveat that although 80 degrees may seem mild to many people, “it feels kind of hot and humid to us.” No radical temperature increases are due anytime soon in the Northeast, she said.

Thursday’s cash quotes went down a little after the EIA report, then leveled off, the buyer said, but there were only a few deals left to be done when the report came out, though. “Actually, though, futures didn’t fall as much as I would have thought” considering how bearish the storage numbers were, she said. Probably Nymex traders took into account that this report included the Fourth of July holiday, which always tends to be an occasion for big injections, she surmised.

A marketer noted that despite only small gains, Gulf Coast cash was strong in comparison to the screen. Gulf Coast/Northeast spreads were “pretty much right on the money” for covering variable costs of transportation, he said. There was “very much” a significant dropoff in late Gulf quotes after the storage report was issued, the marketer reported.

Waha/Permian numbers led most of the price pack with increases of 7 cents as they continued to benefit from heat-related demand in both Texas and the Southwest/California. But the biggest declines were in the Rockies as rainstorms and cloud cover tended to subdue to some degree the high temperatures that had helped boost prices in the region Wednesday.

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