It seemed rather unlikely but a combination of gradually warming temperatures in some areas and modest prior-day futures support propelled the cash market to gains at nearly all points Thursday. Only a small decline at Cheyenne Hub averted an across the board run of higher pricing and kept mixed daily price movement in play for yet another day.

Thursday’s increases were mostly in double digits in ranging from about a nickel to a little more than 70 cents. Other than the Rockies seeing the smallest upticks, the gains were spread fairly evenly among varying market areas.

The Florida citygate and Florida Gas Zone 3 were way out ahead of the rest of the rising market in recording increases of a little more than 70 cents and about 55 cents, respectively; other gains were capped at a little less than 35 cents. After warning of the potential for an Underage Alert Day last Sunday due to cool weather in Florida and high linepack, Florida Gas Transmission swung the other way Thursday in issuing an Overage Alert Day because Sunshine State temperatures were rising into the 90s and linepack had gotten low (see Transportation Notes).

Many analysts made pretty accurate prior estimates of a build centered around 70 Bcf for Thursday morning’s storage report. The Energy Information Administration said 71 Bcf was injected during the week ending July 20. It could be argued that the report was made bullish because 7 Bcf of that total represented a reclassification from cushion gas to working gas. A similar reclassification was made two weeks ago (see Daily GPI, July 13). Nevertheless, Nymex traders appeared to be ambivalent about the report, keeping August futures higher for a while after the report, then sending them into the red for a while before finally winding up the day with the contract up a scant 1.8 cents.

Although a cold front was keeping Midwestern high temperatures subdued and was predicted to do the same in the Northeast over the weekend, price rises were strong in both market areas. The South is getting closer to normal summer highs but still isn’t there yet as few cities are exceeding 90 degrees. Houston is much cooler than usual with predicted temperature peaks of 84 Thursday and 87 Friday, thanks to rains that have occurred nearly every day for more than a month.

The infusion of extra supplies into the Gulf Coast market that had been expected this week as a result of a restart of operations on the Matagorda Offshore Pipeline System (see Daily GPI, July 20) has been postponed until next month. Northern Natural Gas, the MOPS operator, said for a second time this week that construction delays had forced a change in its schedule for restoring service on the offshore line following a June 12 shutdown (see Transportation Notes).

The fuel buyer at a utility in the South said it was quite warm in his area, but it had gotten a cooling rain Thursday afternoon. Count on thermometer readings a little over 90 degrees again Friday, though, he added. However, the South overall is “just not getting the scorcher of a summer that it usually does,” he observed.

The buyer said his company has “still got a little room” for storage injections, but its accounts are now 80-85% full. The utility has enough summer term gas under contract that it will not buy any new baseload for August but will supplement the term supply in daily market as needed, he said. He noted that another company had wanted to buy some of the utility’s Trunkline capacity for August, but its trader had said the basis spread between Trunkline’s East Louisiana and West Louisiana zones and the Consumers Energy citygate in Michigan was so tight that he couldn’t offer enough to make it worth the utility’s while to sell the capacity.

A Florida utility buyer said he was being offered last-day settlement basis of plus 75 cents for Florida Gas Zone 3, while the basis offers for Zone 2 were much cheaper at plus 2 cents. “It’s all about the constraints” on Florida Gas Transmission, he said of the huge basis gap between the two zones.

A Calgary-based producer reported trading the Chicago citygate at basis of minus 19 cents Thursday. It was a pretty hectic day, he said, because of juggling daily and bidweek trading.

©Copyright 2007Intelligence Press Inc. All rights reserved. The preceding news reportmay not be republished or redistributed, in whole or in part, in anyform, without prior written consent of Intelligence Press, Inc.