The market had been able to rise in most cases Thursday despite declining cooling load, but it had to face up to the reality of generally weak weather fundamentals Friday. Prices fell by double-digit amounts across the board, and by half a dollar or more at a majority of points. The previous day’s 20.2-cent drop by September futures and the weekend loss of industrial load were additional factors contributing to the cash softness.

Losses ranged from about 20 cents to nearly 75 cents in all cases but one. A plunge of about a dollar by thinly quoted MRT was something of an anomaly, but its extreme weakness likely was prompted by the pipeline’s System Protection Warning (see Transportation Notes). Most of the largest drops were at Northeast citygates, where Saturday highs would be in the low 80s or less.

The screen provided further negative guidance for Monday’s cash market as natural gas futures dropped another 32.3 cents Friday amid a crash-and-burn performance by Nymex’s petroleum-based offerings in which September crude oil briefly dipped below $115/bbl before closing nearly $5 lower at $115.20/bbl (see related story).

As anticipated, the Gulf Coast market is getting a substantial infusion of fresh supply. The offshore Independence Hub began flows around 5:15 a.m. CDT Friday and would be ramping up production over the weekend, said Rick Rainey, spokesman for majority hub owner Enterprise Products Partners. The restoration of operations after a maintenance outage was delayed by heavy seas caused by Tropical Storm Edouard. Hub output had been in the 800-850 MMcf/d range prior to the outage.

Issues of excess supply were starting to surface in the West. Kern River reported high linepack Friday in the three farthest upstream of its four segments. And El Paso warned shippers that it had set the probability of declaring a Strained Operating Condition or Critical Operating Condition to high because of high linepack. El Paso noted that loads had dropped in its southwest Arizona service area as a result of milder temperatures.

Much of the Midwest was due to have a cool and stormy weekend, thanks to a new cold upper-level disturbance and secondary cold front, according to The Weather Channel (TWC). The disturbance and front would be swinging eastward through the Great Lakes Saturday, bringing similar conditions to the Northeast, where it would feel more like fall than summer, TWC said.

The South could expect diverging weather trends. The western half was predicted to be heating up into the 90s again Saturday following Friday’s brief relief from the heat, while temperatures would fall at the eastern end due to a cold front moving in from the Southeast coast. However, the front was expected to have the entire region cooling off by Sunday. Southern Natural Gas said mean temperatures in its market area were forecasted to be “much cooler for the weekend and a little warmer on Monday.”

The West was in a familiar weather pattern: warmer weather in the Rockies with Denver expected to peak in the upper 80s Saturday, moderately cooler but still very hot in the desert Southwest, and mild to cool everywhere else.

A Midcontinent producer gave equal weight to cash “following the screen” lower and milder weather as reasons for Friday’s softness. But he noted that quotes were rising in late deals, which often indicates the market’s direction on the subsequent trading day. However, prices likely will have a tough time rallying Monday because the National Weather Service’s prediction for the current workweek calls for below-normal temperatures in a wide swath of the U.S. stretching from New Mexico through the Northeast that includes the nation’s most densely populated areas (see Daily GPI, Aug. 7).

It’s currently a confusing market for many traders, the producer continued, as prices occasionally buck prevailing weather trends. The intrastate Oklahoma market was very weak Friday since highs had fallen from around 100 earlier last week to the mid 80s, he said. He suggested that storage buying may have helped prop up Thursday’s market. “We’ve still got a long way to go on refilling storage,” he said, adding that he was aware of some traders and utilities that have fallen behind on their injection schedules. Basis is tight and cash-screen spreads are not very good for injecting right now, he said.

A marketer said her company liked the way both cash and futures prices were going Friday. It was natural to expect softening with unseasonably cool weather expected in the in Upper Midwest during the weekend, she said. Highs would be in the 70s and overnight lows would fall into the 50s, she said. The marketer said it was a busier Friday than usual for her because Consumers Energy had implemented a new billing system a couple of months ago and it was having a lot of problems.

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