After faltering a couple of times earlier in the week, the general bearishness of weather fundamentals reasserted itself Friday. Even with their first prior-day futures support in more than a week, prices fell at nearly all points.

A few gains of 2-3 cents to about 15 cents in the Rockies kept mixed price movement in play. Otherwise the market recorded losses ranging from a couple of pennies to nearly 30 cents.

Although Saturday highs on either side of 100 through the low 110s were predicted from the Texas-Oklahoma area through most of the desert Southwest, they would be limited to 90 or so in the eastern South, according to Weather Central. The weather outlook for the rest of the United States and Canada was generally moderate to cool.

Northern Natural Gas indicated the mild nature of Upper Midwest weather by saying Friday it did not expect its system-weighted temperature of 72 at this time of year to vary by more than two degrees higher or lower through Monday.

Further intermediate-term bearish news for the gas market arrived in a report by the National Oceanic and Atmospheric Administration that El Nino conditions (warming of surface temperatures in the central and eastern equatorial Pacific Ocean) had formed again (see Daily GPI, July 10), which will tend to limit Atlantic Basis hurricane activity. Analysts’ forecasts of the 2009 Atlantic hurricane season have been mostly moderate.

PG&E extended a high-inventory OFO through at least Saturday; the OFO for Friday didn’t prevent small gains at Malin and the PG&E citygate Thursday, but the extension resulted in losses of about a dime and 15 cents at each point Friday, respectively.

A Canadian producer said the Calgary Stampede rodeo had been keeping local trading activity subdued for all of last week. He said he was still bearish on gas prices at this point, based largely on burgeoning storage inventories and last week’s weakness in crude oil markets. PG&E’s OFO extension was just another indication that both PG&E and SoCalGas are becoming very limited in their ability to accommodate future storage injections, he said.

The producer said he normally would expect to see more western pipeline volumes flowing if storage inventories hadn’t already reached typical September volumes before the middle of July. However, people still want to buy storage injection gas at what looks like relatively bargain prices on weekends, he said.

There has been talk in recent years about potential price collapses in the fall due to high storage levels early in the traditional injection season, but it hasn’t happened, the producer acknowledged. However, he thinks the possibility of such an occurrence is much greater in 2009 is much greater than before. “We’re really going to test the storage facilities, and the ability of the grid to move gas around, this year,” he predicted.

After a relatively innocuous uptick of one in the previous week, the number of drilling rigs searching for natural gas in the U.S. resumed its dive during the week ending July 10, falling by 16 to 672, according to the Baker Hughes Rotary Rig Count ( The tallies went down by five in the Gulf of Mexico and by 11 onshore, Baker Hughes said. Gas-seeking activity is 2% lower than a month earlier and an astounding 56% less than the year-ago level, it added.

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