A general dearth of weather support kept downward pressure on cash prices Tuesday, with across-the-board declines ranging from a little under a nickel to nearly a quarter; most were in the teens. A moderate rally in July natural gas futures, in sympathy with strong performances by Nymex’s oil-related products, was not expected to be sufficient to overcome bearish fundamentals, so look for more softness Wednesday.

Cold fronts and/or rainstorms kept temperatures ranging from moderate to cool from the Northeast through the Midwest and Upper Plains, and a southward-moving front was gradually eroding air conditioning load in the upper reaches of the South. Obviously it wasn’t hot enough across the southern tier of states to make up for the load weakness elsewhere.

Alhough PG&E issued a new high-linepack OFO — this time with zero tolerance for positive imbalances (see Transportation Notes), its effect on prices was less devastating than the previous one for last Saturday, when weekend prices plunged nearly half a dollar at the Southern California border and nearly 30 cents at the PG&E citygate. This time both points lost about 20 cents. That was somewhat curious, since all three Palo Verde nukes were still down on Friday; but as of Tuesday morning two units were at 100% and the third at 90%, according to the Nuclear Regulatory Commission.

Prices are moving downward more slowly this week than they moved higher last week, a Northeast utility buyer said, “but at least they’re going in the right direction now” from his point of view. He didn’t see any significant turns toward hotter temperatures or any other bullish fundamentals on the horizon for at least the next week or so, saying Northeast weather looks like it will stay relatively cool for the official opening week of summer. The buyer said people were starting to make July capacity release requests to his company, but they were still finalizing preparations for baseload supply deals.

Heaping on more bearish weather news, a Calgary-based producer said are temperatures were around 25 degrees C. Tuesday afternoon (high 70s F.), calling it “just gorgeous weather for us.” Due to mild weather, he went on, weak demand continues at the Chicago citygate, where Wednesday’s highs are not expected to surpass the mid 70s. The producer reported doing some Chicago business for July at NGI‘s index. It’s looking like citygate basis will be flat, he said, which would be decidedly weaker than June’s average of plus 4.25 cents.

By the way, stand by for a bit of a market slowdown in mid-July. The Calgary Stampede rodeo starts July 9.

The weather outlook remains somewhat bearish for next week’s gas prices, according to the National Weather Service (NWS). In its forecast for the June 28-July 2 period, NWS sees above normal temperatures in only two limited areas: the southern halves of all Southeast states from South Carolina to Texas, along with all of Florida; and in the Pacific Northwest from Northern California through western Montana. It predicted a large section of below normal temperatures that included most of the Northeast and Midwest and stretched through the central Plains as far west as eastern Colorado; and also along a coastal strip of extreme southwestern California. Normal conditions are predicted in the rest of the Lower 48 states.

Lehman Brothers analyst Thomas Driscoll projects that EIA will report a storage injection of 100 Bcf for the week ended May 18, while Citigroup’s Kyle Cooper came in with a lower prediction of between 85 Bcf and 95 Bcf.

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