The August aftermarket was launched Thursday with modest downturns at nearly every point. Malin, the PG&E citygate and a few Rockies points were flat to a couple of pennies higher; otherwise, declines ranged from about 2 cents to a dime.

The slight softness matched what several NGI sources had predicted for swing prices in early August. A Texas producer reinforced that perception Thursday, saying, “The bottom’s not going to fall out of the market, but I think we will see a slow grind lower for a while.” Noting that he sometimes sells gas into Florida Gas Transmission, the producer noted that the pipeline’s lifting of an Overage Alert Day notice was another sign of weakening demand.

The Energy Information Administration matched its previous report in saying 83 Bcf was injected into storage last week. The West Region was unchanged, meaning all of last week’s increase occurred in the East and Producing Regions. The screen had dived a week earlier when an identical volume was reported; this time it achieved a daily gain of a nickel to $4.718, although at one point it had reached $4.790.

The volume was near the low end of previous expectations this time, and one source made this observation: the 83 Bcf for the week ended July 18 was achieved during a period of both major supply outage and high power generation demand, and the fact that the volume didn’t increase for a period with no such constraints may have impressed some Nymex traders into giving it an even more bullish spin.

However, a couple of traders see little likelihood of a rally Friday. Besides the usual weekend dip in gas load, the Northeast and Midwest will continue to experience unseasonably mild weather, and previously severe heat in the Pacific Northwest was already starting to recede Thursday, they pointed out.

Northeast weather will stay “benign” through the first week or so of August, with very little cooling load, a marketer said. “It’s hard to believe we’re this far through the summer with almost nothing in the way of heat waves,” he said, adding that such gas load-dampening conditions are being reflected in regional power prices “that don’t get above $70/MWh even in the peak hours.” In a side note, the marketer said he has observed the winter Texas Eastern M-3 basis market “getting weaker by about 1-2 cents per week.”

A Midwest utility buyer said he had no deals to report for Friday flow, but had bought a couple of intraday packages at Northern Natural-demarc for premiums of a nickel to 12 cents above the next-day average in the mid $4.50s (which happened to match his August baseload purchase). He said he paid the intraday premium to satisfy cash-out balancing needs and that it was not indicative of day-to-day weather changes. Temperatures in his area “are really cool,” he noted.

A Canadian producer said intra-Alberta prices throughout the C$5.20s (for same-day gas) were close to August baseload levels, “but now the daily numbers are getting stronger” due to the screen run-up.

What The Weather Channel called a “fairly vigorous tropical low” was about 1,400 miles east of the Lesser Antilles (the island chain between Puerto Rico and Venezuela) and continued to show signs of development. It could become the Atlantic basin’s eighth tropical depression of the year but for now is only a marine hazard, TWC said.

As August baseload business wound to a close Thursday, one source said a San Juan-Blanco purchase in the mid $4.00s prior to the weekend had yielded to numbers in the high $3.90s on the following Monday. In the same time period, his Friday Transwestern-Permian deal in the low $4.40s was followed by one about 15 cents lower on Monday. “Transwestern came off fairly hard,” he said. “I watched it getting weak while trying to move it to the [California] border.”

Another trader confessed, “I guess I overdid it a little on monthly deals at the SoCal border. Just more gas to sell in the daily aftermarket, I guess. I don’t think prices are going to be coming down much if they do at all, and cash could jump significantly in August.”

An industrial end-user commented that the just-completed bidweek “was even slower than usual. At least it helps that prices are coming our way,” referring to the significant August index declines from July levels.

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