A Tuesday gain of 5.1 cents by June natural gas futures proved unable to sustain that day’s cash rally through Wednesday. A few flat to slightly higher points averted a solid front of bearishness, but for the most part cash prices saw generally small declines Wednesday. A slow rise in the South’s air conditioning demand, which had received some credit for the Tuesday rally, was no longer able to offset the continuing lack of heating load in the northern half of the U.S.

Price drops ranged from a couple of pennies to around 15 cents. Most of the smallest ones were in the West, where much of the market’s remaining heating load currently resides.

A rebound Thursday appears unlikely after bearish inventory reports broke the back of any residual support from petroleum product futures. June crude oil, which had neared $75/bbl in Tuesday’s trading, plunged $1.66 after the government reported the first rise in motor gasoline stocks in nine weeks and that crude inventories were at their highest level in eight years.

Wet but still relatively moderate temperatures were forecast for Thursday in both the Northeast and Midwest. The South’s rise in heat levels has become almost stationary, with few areas outside South Texas and Florida expected to get above the 90s.

There’s actually still a fair amount of heating load in Western Canada, said a Calgary-based producer who said a few evening snows in recent days were taking area lows down to the high-20s. He agreed with other sources that Wednesday’s trading was “pretty quiet.” At the Chicago citygate, Nicor restrictions “are still there, but their caps are a lot higher,” he said, calling it a big improvement over April. All the Nicor nominations were getting through so far this month, as far as he was aware.

The Northeast is “cool at night and nice in the day,” said a producer who trades the region. He noted that Henry Hub cash numbers have been staying almost exactly a dime back of the prompt-month screen for a while now. Quotes were moving higher Wednesday until they peaked around 10:30 EDT and then drew back a little due to liquidity issues and the general lack of demand, he said.

A marketer in the West agreed that prices were gradually trending higher early in the morning, but he said he thought the petroleum products inventory report led late prices lower. Spreads were extremely tight in the Pacific Northwest, he said, so it was hard to make transportation work. Sumas, Opal and Northwest South of Green were all within a nickel of each other, which was unusual, he said.

The marketer noted that Northwest’s Jackson Prairie storage facility still has a lot more room for injections than most such facilities, especially those to the east. “I don’t hold firm storage, but if I did, I’d be a lot more aggressive in getting the gas into the ground right now,” he said.

With less than a month to go before the 2006 Atlantic hurricane season officially starts, the Minerals Management Service (MMS) released what it said was its final report on shut-in statistics related to last year’s Hurricanes Katrina and Rita. With 45 companies reporting, the MMS said 1,295.31 MMcf/d remained shut in as of Wednesday. That was a reduction of 38.2 MMcf/d from the volume reported April 19. Cumulative deferred production since last Aug. 26 now totals 748.9 Bcf, or 20.518% of the Gulf of Mexico’s normal annual output of about 3.65 Tcf, MMS said.

“Given the relatively small variations in the shut-in statistics and the fast approaching 2006 hurricane season, this will be the final report for Hurricanes Katrina and Rita,” the agency said. “In the last few days there has been minimal improvement in the production numbers and this appears to be a trend that will continue with incremental movement over the next several months.”

The Reuters news service survey of 15 industry players found storage injection estimates of 45-90 Bcf for the week ending April 28; the average was about 67 Bcf, Reuters said.

Bentek Energy said its storage sample indicated a build of 59 Bcf last week. It broke its projection down to 43 Bcf in the East region and 8 Bcf each in the Producing and West regions.

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