Prices were mildly softer for the most part Friday, but rising heat levels in the South and the resultant increase in competition for Gulf Coast supplies had some points trading flat to a little more than 15 cents higher. However, only three of the gains exceeded a couple of pennies.

The majority of losses ranged from 2-3 cents to about 45 cents and were most prominent at western points.

Prospects for a rally in the coming week appear to be highest in central U.S. markets, since the National Weather Service has predicted above normal temperatures throughout most of two-thirds of the nation’s midsection. But prices will start the week with no prior-trading-day support from the screen, as the June futures contract slid another 3.5 cents Friday.

As The Weather Channel (TWC) expressed it Friday afternoon, “Southeastern denizens, start up your air conditioners! The string of cool days is coming to an abrupt end on Saturday.” Yes, cooling load, which has been somewhat scarce recently in a region that normally would have been getting rather muggy already, would start to build over the weekend. Highs in the upper 80s were forecast for Saturday in Atlanta and New Orleans, while 90 degrees or more was due in most of Florida and in cities such as Tulsa, Little Rock, AR and Shreveport, LA.

Moderately cool weather that spurs neither heating nor cooling demand would continue to dominate the Northeast. The forecast for the Great Plains from South Dakota into Oklahoma called for afternoon highs in the 80s and 90s, TWC said, but to the east in the Midwest temperatures would only be rising a little bit.

In the West, triple-digit highs were due to persist in the desert Southwest at least through Saturday, but conditions were expected to still range from mild to chilly from the Pacific Northwest through central California and in the region’s mountainous sections.

Columbia Gas spotlighted another facet of the rapid 2006 injection rate when it reminded Firm Storage Service (FSS) customers Friday that its rate schedule requires that quantities in FSS storage not exceed 60% of the Storage Contract Quantity (SCQ) levels as of June 30. Additionally, Columbia said, as of Aug. 31 FSS quantities should not exceed 85% of customer SCQ levels.

A Northeast utility buyer said his company was “pretty healthy on our gas in the ground,” referring to its storage injection schedule. As a result, he had backed off considerably on daily purchases, especially since the utility’s throughput was currently pretty light. “It’s kind of cool,” he said, but with no heating load of any substance, and obviously little power generation demand with no air conditioning going on.

Everybody seems to be having problems with storage filling up quickly, the buyer said, “but there always seems to be something like a hurricane that comes along” to avert a storage crisis. His company certainly doesn’t want its accounts to get too full too soon, he said, and will continue to spread its injection purchases out, with the possible reward of much cheaper supplies down the road.

A marketer in the Upper Midwest, reporting Consumers Energy purchases in the mid $5.90s Friday, said local weather had been “cool and damp in the 50s in the last couple of days,” but was expected to start getting warmer Saturday. However, she added that she had just started to plant her annual garden, saying she was being wary because “two summers ago we saw a frost around the first of June.”

And in the Pacific Northwest, a utility buyer said local weather had been “hot” earlier in the week but had returned to normal by Friday. It will be cool in the Pacific Northwest this week, she noted, so although cash prices might rally in other areas due to increased air conditioning load, she expects them to remain soft in her area.

©Copyright 2006Intelligence 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.