This week’s price run-ups got slower again Wednesday, essentially grinding to a halt in parts of the cash market. Weather fundamentals remained strong for the most part as high temperatures ranging from very warm to severely hot continue to dominate the U.S. climate except along the relatively cool West Coast. The natural gas futures screen continued to lend support to cash numbers with a gain of 15 cents-plus, accompanied by strong showings in crude oil, heating oil and New York Harbor unleaded gasoline. However, expectations of another bearish storage report Thursday reportedly tended to temper new buying for injection purposes.

A large majority of points moved only about 3 cents up or down, with the modest weakness concentrated in the West. A moderate bias toward the upside included several gains of 4-7 cents, while a very few scattered points fell about a nickel or so.

There was a “lot of power plant demand” with the hot weather and virtually all generators having recovered from last week’s blackouts, said a Midcontinent/Midwest marketer. “That’s the big story as far as we’re concerned.” It will be interesting to see what Thursday will bring, he went on. Temperatures will stay hot for a while longer in the Midcontinent, the marketer said, but most of the Midwest will cool off for the weekend. Counting himself among those anticipating a bearish storage number, he said price direction will be a close call, but his traders expect cash to stay firm Thursday, “then probably tumble” for the weekend due to the storage report and milder market-area weather.

Saying his company was calling for “about an 80 Bcf injection,” another marketer commented, “I don’t think much of the extra gas that was flowing during the blackout will end up being taken into account until next week’s report,” meaning that their estimate was assuming fairly typical conditions for last week. The next week’s report “could be astonishing,” he added. If EIA comes out as high as their 80 Bcf estimate, the marketer said, “we could see some big sell-offs on Friday as folks will scramble to sell what they can before they get stuck with it towards the end of the day.”

Citigroup analyst Kyle Cooper’s “final estimation” for Thursday’s storage report calls for a build between 76 Bcf and 86 Bcf. “Based on electricity demand, we will alter our previous statement indicating we thought our estimate was more likely to be low rather than high,” Cooper said Wednesday. “Electricity demand was much stronger than expected and would thus lead us now to believe we are high rather than low.”

It’s been quiet this month, said a Gulf Coast producer who added that his Florida customers were “swimming in gas.” He reported hearing that Florida Power & Light was in a selling mode Wednesday, “and they’re the state’s biggest user by far, so that tells you that it’s a fairly weak market.”

The producer expects to see “a choppy market” for a while, with futures roaming within a $4.80-5.25 range. He also looks for cash numbers to keep trading above index for the rest of the month. Conceding that it might sound strange to hear from a producer, he feels that based on the weather and storage fundamentals this summer, prices should be “a lot lower” than where they are now.

Katy prices were strong Wednesday, “but not as strong as Waha or Henry Hub,” an intrastate Texas trader said. Actually, Waha and Henry quotes were merely playing catch-up with Katy prices that had broken above $5.00 Tuesday in reaction to 100-degree heat in the Dallas-Fort Worth area. Houston, meanwhile, was cooler earlier this week due to cloud cover, the trader explained. He also noted that the Wolf Creek nuclear plant outage in Kansas coupled with triple-digit temperatures around Kansas City were keeping Midcontinent prices fairly firm. “Otherwise, the nukes are running at high utilization rate,” he said.

The National Weather Service’s forecast for the Aug. 25-29 period calls for above normal temperatures throughout the Midwest and running north of a line along the northern borders of Arkansas and Oklahoma to encompass the Plains states, the Rockies and most of the West Coast states and the desert Southwest. Below normal readings were predicted south and east of a line running west from North Carolina and then dipping southward through central Texas.

A tropical disturbance reached the Lesser Antilles island chain in the eastern Caribbean Sea, The Weather Channel reported, but it added that “the good news” was that the system had not developed and remained disorganized. Otherwise the tropical Atlantic scene is quiet.

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