A continuing widespread heat wave and news of a new tropical disturbance east of the central Bahamas proved unable to sustain Wednesday’s overall price increases, resulting in Thursday numbers ranging from flat to down as much as 30 cents. Rockies/Pacific Northwest and California points were most resistant to softening.

The National Hurricane Center (NHC) reported Thursday afternoon that Tropical Depression Six (TD6) had formed and had maximum sustained winds of nearly 35 mph, the level at which it would qualify to be named Tropical Storm Franklin. However, it appeared that Gulf of Mexico producers can rest easy for a change, because NHC projected that TD6 would remain out in the Atlantic on a general northward heading before curving back toward the east Saturday.

Shut-ins prompted by Hurricane Emily, now a tropical depression deep inside northeastern Mexico, are dwindling rapidly, having fallen by nearly two-thirds Thursday from the day before. Based on reports from 27 companies reaching it by 11:30 a.m. CDT, Minerals Management Service said 219.86 MMcf/d remained offline in the western Gulf of Mexico, down from 616.33 MMcf/d on Wednesday. It also said 30,183 bbl/d of oil was still shut in, and that 24 platforms and five drilling rigs remained evacuated. The agency will release its final report on Emily-related shut-ins Friday.

Besides TD6, forecasters also noted a tropical wave in the western Caribbean Sea that was expected to bring heavy rain to Mexico’s Yucatan Peninsula, which had recently been battered by Hurricane Dennis, and the northern countries of Central America before entering the Bay of Campeche in several days, according to The Weather Channel.

The market got a bearish signal from the Energy Information Administration, which said 59 Bcf was injected into storage during the week ending July 15. The volume was near the high end of prior expectations that had taken into account that the period covered by the report was marked by a lot of hot weather-driven power generation demand combined with Dennis-related supply outages. Futures traders took the August natural gas contract a quarter lower on a day in which Nymex’s petroleum-related products also took significant hits.

Meanwhile, heat levels are expected to remain high over most of the U.S., although a cold front should bring a little relief to New England Friday. Highs of 100 degrees or more will pervade much of the West and Midcontinent/Central Plains regions.

A Gulf Coast producer who trades the Northeast said the new tropical disturbance could be construed as slightly bullish, since it further confirmed forecasts of an especially active hurricane season. But he still looked for further price softness Friday, observing that the storage report was “pretty bearish” when he had been expecting a 40-45 Bcf build. “I’m going to sell early Friday because I don’t want to get stuck with gas late,” he said. Despite double-digit losses at Northeast citygates, regional power prices were still supportive of strong gas demand, he added. Even after the EIA report came out, late market-area prices stayed stable, he said.

The producer noted that beside the Bahamas disturbance, there was a tropical low off the coast of West Africa that had a long expanse of warm ocean water over which to develop on its journey west toward North America. He reported being impressed by how accurately the forecasters have been able to project the paths of tropical storms and hurricanes so far this season.

Despite general feelings that prices will keep going lower Friday, a Gulf Coast marketer saw an outside chance of mild firmness. “I’m guessing that the screen will come up overnight,” he said, and that along with the continuance of hot weather may allow slightly higher cash numbers Friday. Trading got “really sloppy” Thursday after the EIA report, he said. Unlike the Northeast market area, Gulf Coast quotes headed steeply downward after the storage number came out, but of course there wasn’t much gas left to be traded by then, he said.

“I’m buying only a little cash gas each day” but may stock up on more if weekend prices go down Friday, a marketer in the Upper Midwest said. He reported afternoon temperatures in the low 90s in his area. “I was expecting a hot summer, and we’re getting it,” he continued, noting that it was a little unsettling to realize that Thursday was only one-third of the way through the season, with the hottest conditions yet to come.

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