Prices were mixed in Wednesday’s resumption of trading after a four-day holiday weekend, but generally tended to be stronger in the Midcontinent and West and weaker in the Gulf Coast and Northeast. Rains were dampening power generation load from New Mexico and Texas through the Southeast and Mid-Atlantic, and below normal temperatures in several other areas left the desert Southwest as the only remaining repository of high heat levels.

Cash quotes also had slightly negative guidance from the preceding Friday’s futures drop of 3.1 cents.

Due to more pipelines and pricing points being in the East, the Gulf Coast/Northeast softness made declines ranging from a little less than a nickel to about 15 cents dominate the overall market. However, a few flat to slightly higher numbers were scattered among those two regions and the Midwest. The gains elsewhere also were as small as a little less than a nickel but saw greater heights of up to 40 cents or so.

The heat in the Southwest and a warming trend in the Rockies may allow some western points to continue rising Thursday, but most of the market will come under downward pressure from a 33.9-cent plunge in August futures Wednesday. The natural gas contract sagged mightily despite great strength in Nymex’s petroleum-based offerings, with crude oil making yet another record prompt-month settlement as geopolitical tensions (especially North Korea’s test-firing of several missiles) continued to worry crude traders (see futures story).

The South is returning to below normal conditions for midsummer, so demand for power generation burns was relatively weak (for example, Atlanta’s high was expected to drop from 91 degrees Wednesday to the mid 80s Thursday). Another cold front in the Northeast will have highs struggle to surpass the 70s, and temperatures will be similarly moderate in the Midwest, according to The Weather Channel.

Yes, it looks like prices will still be headed downward Thursday, said a Gulf Coast producer. They were tailing off in Wednesday’s late deals after the screen showed up looking so weak, and that’s usually a reliable signal of next-day price direction. The South’s rains meant there are few calls for supply from electric utilities currently, he added, but the region will start heating up again when the rain stops later this week.

A western scheduler said he and colleagues were “scratching our heads at seeing the PG&E citygate trade as much as 41 cents over Henry Hub” at one point Thursday. That’s rather unusual since the California market normally is cheaper than Hub pricing, he said (NGI‘s PG&E citygate index of $5.67 for July is 20 cents less than its Henry Hub index). The citygate premium was especially hard to understand since inland California temperatures have moderated since getting over 100 degrees recently, and are now more like the mid to high 80s, he said.

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