Apparently in acknowledgment that weather-based load is fairly modest outside the West, prices fell (mostly by small amounts) at a majority of points Thursday. High heat levels west and south of the Rockies resulted in San Juan Basin spikes and more moderate gains in some other western locations.

Losses, most of them in single digits, ranged from 2-3 cents to about 40 cents. El Paso’s Bondad and Blanco pools in San Juan Basin shot up nearly $1.70 and a little more than $1.50, respectively, in response to sizzling temperatures in California. Otherwise, Thursday’s gains ranged from a couple of pennies to a little more than 40 cents. There were a few instances of flat numbers.

With consensus expectations in the upper 80s Bcf, the Energy Information Administration exceeded them slightly in reporting a 93 Bcf addition to storage during the week ending May 9. Nymex traders seized upon the slightly bearish news to send June natural gas futures 19.9 cents lower on the day, giving negative guidance to Friday’s cash market.

Even with overall softness Thursday, recent price advances have a large majority of the market sporting $10-plus averages.

The Northeast and Midwest will be swapping weather trends Friday. Whereas the Midwest will be starting to warm up again, the Northeast will get a bit cooler. Neither region will be especially cold, however, so heating load is marginal.

A cold front has blanketed most of the South, with the result that few locations in the region are still topping 80 degrees. That means gas-fired peaking generation units are only sporadically getting dispatch for the time being.

The western heat extends from the desert Southwest all the way into the Pacific Northwest, where Seattle and Portland, OR, are expected to experience Friday highs in the mid 80s and low 90s, respectively. Inland California will see a repeat of peak temperatures around 100 degrees. The Rockies were still cold Thursday but are entering a warming trend in which Denver’s high is forecast to be just shy of 70 Friday.

The Weather 2000 consulting firm noted that the West is experiencing its first widespread heat spell of 2008 “on schedule.” It expects the heat to last three to four days in the Northwest quadrant and four to six days in the Southwest quadrant before easing up. “From southern Oregon to southern Arizona this episode will feature widespread and consecutive” readings of 100 degrees or more, which will constitute a significant [and] substantial regional heat wave for this time of year.”

Despite some transport constraints remaining in effect, it was obvious that San Juan gas was getting the lion’s share of orders to supply California’s power generation needs, because most Rockies points were softer. A warming trend is lowering localized demand in the Rockies.

The Calgary area, after experiencing snow and freezing temperatures a week ago, is getting quite a bit more spring-like with highs in the 70s, said a producer. Noting Thursday’s screen decline and the usual weekend drop in industrial load, he expects most prices to “come off a little bit” Friday. However, heat in the West might keep numbers firm there, he said.

Despite Thursday’s big gains in San Juan Basin, until Transwestern’s outages (see Daily GPI, May 13) end, San Juan will continue to have some of the lowest-priced gas in the spot market, the producer said. “It’s been tough keeping our San Juan gas moving” this week, he added.

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