The midweek buildup of heat in many sections of the U.S. and Eastern Canada was able to overcome further prior-day screen softness in spurring rebounds in most of the cash market Thursday. However, it’s highly unlikely that gains will continue Friday after a very bearish storage report led to a steep plunge in August natural gas amid another meltdown day in Nymex’s energy futures complex.

Several points, mostly in the West, were flat to about a dime lower. Sumas led the declines as forecasts of Pacific Northwest highs in the 70s Friday meant little in the way of either cooling or heating load.

Otherwise gains ranged from 2-3 cents to about a dollar. Northeast citygates, where peak temperatures will be rising into the low to mid 90s Friday as far north as lower New England, recorded nearly all of the increases of about 35 cents or more. They were led by a dollar spike at Iroquois Zone 2.

The Energy Information Administration (EIA) said 104 Bcf was injected into storage during the week ending July 11. The volume was close to the high end of prior estimates and well above consensus expectations in the high 80s Bcf. Nymex traders took the August natural gas contract 86.1 cents lower and caused August crude oil to settle below $130/bbl for the first time since June 6 as the overall demand destruction from a worsening economy and high energy prices were being taken more seriously.

A producer pointed out that the EIA’s weekly storage survey only covers through 9 a.m. EDT each Friday, so the most recent report included a lot of the low-demand Independence Day holiday.

Texas Eastern indicated the growth of Northeast market-area demand by saying it was experiencing large due-pipe imbalances on its system and would take action, including force balancing, if necessary.

The Independence Hub platform in the deepwater Gulf of Mexico will shut down for four days next week to confirm that repairs of a leak on the flex-joint assembly connecting the platform to its export pipeline are working as intended (see Daily GPI, June 17). No specific dates for the outage have been set yet, said Rick Rainey, spokesman for Enterprise Products Partners, majority owner of the hub and 100% owner of the Independence Trail export pipeline. The hub currently has output in the 800-850 MMcf/d range, he told NGI, and flows are expected to ramp back up to that level quickly after the pipe check is finished.

While heat levels will continue growing Friday in the Northeast, they will change little in most of the rest of the U.S. and will be going down in some parts of the Midwest.

The National Hurricane Center (NHC) rated two low-pressure areas — one off the coast of Florida and the other in the southeastern Caribbean Sea — as having “medium potential” for development into a named storm. But a tropical wave approaching northeastern Nicaragua, although well organized, had “low potential” for becoming a tropical depression before moving inland Thursday night, NHC said.

The low-pressure system 75 miles east of Jacksonville, FL, as of Thursday afternoon was seeing increased thunderstorm activity, and “environmental conditions could allow for some slow development of this system during the next couple of days as the low drifts to the north or north-northeast,” the agency added. That would be moderately bearish for gas prices as the rains would tend to reduce cooling load in the South Atlantic and Mid-Atlantic coastal areas.

A Midwest utility buyer said that while his area was still peaking in the low 90s Thursday, highs should be limited to the mid 80s Friday. Rain will keep the company’s service area “relatively” cool from Friday through next week, he said, but it shouldn’t cause a repeat of recent flooding in the Midwest as the rains will be scattered and intermittent.

The storage number “was good news,” the buyer continued. He said many of the utility’s customers were locking in prices for up to two months out Thursday in response to the huge futures drop. There was a “lot of activity in that area,” he said.

He said his current transportation peeve was a series of compressor station maintenance projects on ANR and their related constraints. If he had his druthers, he’d have ANR to complete the work sooner rather than later.

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