With Gulf of Mexico (GOM) production rising again following the passage of Hurricane Dolly and cooling load remaining generally light outside the southern half of the U.S., prices continued to fall Thursday at nearly all points. The Northeast and Midwest are experiencing warming trends but only to seasonable temperatures with highs mostly in the mid 80s.

A few flat points, mostly in the West and Midcontinent, avoided Thursday’s overall softness. Losses ranged from 2-3 cents to about 40 cents and tended to be largest in the Gulf Coast and at Midwest and Northeast citygates.

The Energy Information Administration’s report of an 84 Bcf storage injection during the week ending July 18 was slightly above consensus expectations in the low 80s Bcf. Despite the report’s seemingly nominal bearishness, Nymex traders seemed to be most impressed by the fact that it bit a sizeable chunk of the year-on-five-year average deficit and sent August futures to a plunge of 46.5 cents on the day (see related story). Activity was highly volatile with a trading range of just over a dollar between top and bottom.

Henry Hub, which had traded at a dime premium to the screen Wednesday, widened the gap to about 38 cents Thursday. Nearly all points are at triple-digit deficits to first-of-month indexes; only the Rockies are less than a dollar below index.

After rising through Wednesday, GOM production outages and the numbers of evacuated infrastructure were dwindling Thursday — enough so that Minerals Management Service (MMS) said it would issue no more reports on shut-in and evacuation data related to Dolly. Based on reports received from 21 companies by 11:30 a.m. CDT, MMS said shut-ins totaled 420 MMcf/d of gas (down from 606 MMcf/d Wednesday) and 18,047 b/d of oil (down from 58,122 b/d). Its count of evacuated platforms and mobile drilling rigs fell from 62 to 43 and from eight to four, respectively.

Dolly’s time spent over land reduced it to a tropical storm and then to a tropical depression as it passed into Mexican territory near Laredo, TX. Despite its weakening, the storm was still dumping heavy rains over South Texas and northeastern Mexico Thursday, the National Hurricane Center (NHC) said, adding that it would issue no further advisories on Dolly. It expected Dolly’s remnants to dissipate Friday.

A large westward-moving tropical wave was in the eastern Atlantic about 700 miles west of the Cape Verde Islands, NHC said, adding, “Shower activity is very limited at this time and significant development of this system is not expected during the next couple of days.”

Much of the southern half of Texas was being cooled Thursday by Dolly-created rains, but the respite from the heat was due to be brief. Highs will be rising back into the 90s in all of the state Friday except in the storm’s vicinity.

The South and Southwest continue to have the lion’s share of air conditioning load with Friday highs forecast to be mostly in the mid 90s and upper 100s, respectively. The Rockies will be a few degrees cooler, but Denver will still be peaking in the low 90s.

PG&E did not issue an OFO, even though linepack was at the utility’s minimum target levels Thursday and inland California is experiencing highs in the low to mid 100s.

There’s no cooling load at all in the Calgary area with daily temperatures failing to get above 70 degrees, said a local producer. The cash market was only mildly lower at first, he said, “but right after the storage number came out, prices went south in a hurry.” There’s no doubt that more losses are in store Friday, he said.

It’s a little too early for any significant bidweek business, the producer continued. He thinks most traders will want to wait until after the weekend, when they’ll have fresher weather forecasts and futures numbers to work with, to get really serious about August baseload deals.

It’s “very nice weather” currently in the Upper Midwest, so his company has been buying only a little spot gas lately, said a marketer in the area. He thought this week’s futures weakness was partially due to some funds abandoning commodities investments. They “must be sitting on their money,” though, because it doesn’t seem to be going into a very weak stock market, he added.

The marketer reported hearing early August basis numbers of plus 28-30 cents for Consumers Energy and plus 26-28 cents for MichCon.

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