As expected, moderating weather trends in northern market areas and the decline of industrial load that occurs over a weekend caused cash prices to drop at nearly all points Friday. But the most recent string of mixed price movement was preserved by gains of up to about 30 cents in the Rockies, where highs in the mid 90s were predicted for Saturday in Denver, Salt Lake City and Cheyenne, WY.

All other points outside the Rockies saw double-digit losses ranging from about 20 cents to nearly 70 cents.

The National Weather Service was only partially correct in predicting above-normal temperatures in nearly all of the U.S. during the June 25-29 workweek (see Daily GPI, June 21). True, most areas were fairly hot during the first half of the week, but the Midwest had cooled off a lot with highs in the 70s Thursday and the Northeast followed suit on Friday.

High temperatures are expected to be five to 10 degrees below average Sunday and Monday in the Northeast, according to The Weather Channel (TWC). Coincidentally, those are the flow days that were being traded in the cash market Friday due to the transition to July falling on Sunday.

Sources said they saw little chance of a price rally in the East this week as moderate weather continues. However, chances are good for firmness in the West, where heat over the interior West will expand west of the Cascade Mountains by midweek, TWC said. It also said that over the next seven days in the desert Southwest, highs will range from around 105 in Tucson to approaching 125 in Death Valley. “Salt Lake City may hit 100 or slightly above Sunday, Wednesday and Thursday,” the forecaster said, adding that Denver could hit 97 by Monday. And the Pacific Northwest, which has been cooler than the rest of the West recently, will see some heat as Portland, OR, nears 90 Wednesday and Thursday while Seattle edges into the 80s, TWC said.

The only major transportation constraint going into the weekend was a Saturday high-inventory OFO issued by PG&E (see Transportation Notes). But the PG&E citygate saw one of the lowest price declines of about 20 cents Friday.

One source thinks the coming week is going to be “dead” for gas trading. There’s Canada Day on Monday, Independence Day on Wednesday and the Calgary Stampede rodeo starts Friday, which always draws a lot of U.S. gas traders, he said.

A Northeast marketer looks for softness all week in his area, noting that peak temperatures will stay in the low 70s. He perceived a “dull week of bidweek trading. Bids were scarce, he said, reflecting a lot of reluctance by buyers. Algonquin citygate seasonal basis in early summer is plus 74 cents, “but we found a lot of people not willing to pay that much,” he said. Many of them were buying little or no baseload, saying they would take their chances on the July daily market, hoping that prices will keep falling, he added.

A trader representing several Gulf Coast independent producers said she was unaware of anyone still trading July baseload Friday. She did know that no one called her company about it. She noted that August futures went up another 11.8 cents Friday, but she looks for cash softness to continue because “we can’t see any hot weather in the near term.” It’s going to take “some real heat” to get this market rising again, she said. According to AccuWeather, Boston daily highs will remain in the 70s through July 12, she added.

A Midcontinent producer agreed that the market is looking soft for a pretty good while. Usually his company sells gas into an intrastate Oklahoma pipe, but there was so little load in the state that “we took it into an interstate” Friday.

Things were pretty quiet with temperatures reaching the low 80s, a Lower Midwest utility buyer said, so his company had almost no power demand. He reported getting a “bargain” on July baseload supply Thursday, saying it was priced 10-15 cents less than where the utility thinks the Northern Natural-demarc index will be.

A Northeast utility buyer said his area was cool with a high of only 70 forecast for Saturday,but that wasn’t enough to create any heating load. The Northeast should warm up a bit after the weekend, but then get cooler again toward the end of the week, he said. “Our storage is good, so we bought only a small amount of July baseload,” he said.

The number of drilling rigs searching for gas in the U.S. fell by six to 1,489 in the week ending June 29, according to the Baker Hughes Rotary Rig Count (https://intelligencepress.com/features/bakerhughes/). The drop was split evenly between onshore and the Gulf of Mexico, Baker Hughes said. Its latest tally was unchanged from a month earlier and 10% higher than a year ago.

©Copyright 2007Intelligence Press Inc. All rights reserved. The preceding news reportmay not be republished or redistributed, in whole or in part, in anyform, without prior written consent of Intelligence Press, Inc.