Cash prices were unable to sustain this week’s earlier upwardmomentum and were turning modestly softer Wednesday. Severalsources expected declines to grow greater today since most of thescreen’s dive of nearly a dime Wednesday followed release of AGA’sstorage report, well after cash trading had been completed.

Although several traders thought the AGA figure of 32 Bcfinjected into storage last week met general expectations, a GulfCoast marketer said that was nonsense. The “money people” to whomhe pays most heed on such matters had expected a much smallerinjection volume between zero and 17 Bcf, the marketer said, so theactual report was significantly higher than their projections. Manypeople may have thought a 32 Bcf report was neutral, he said, butthe Nymex traders disproved that by driving the June futurescontract much lower immediately afterward.

The marketer did concede, however, that based on the five-yearaverage for this time of year, “injections should have been morethan 50 Bcf,” so maybe there was a slight amount of bullishness inthe report.

One source saw the Midcontinent market as flat to a bit softerbecause “there’s no weather to speak of in the Midwest.” But aNortheast utility buyer reporting “nice weather” Wednesday said theregion should be experiencing temperatures in the 80s by Friday, sothat factor could help arrest the developing softness in cashprices. “We’re going from winter to summer in a hurry,” he said.

A Gulf Coast trader noted there was already some “good demand”related to summery weather coming out of the Southeast. Apparentlyquite a few nuclear units and other alternative fuel power plants aredown in the region, he said, because a lot of gas peaking units areactive. Florida Gas Transmission’s continuation of a market-area OFO”until further notice” (see TransportationNotes) reflects how strong cooling load is in the Sunshine State,the trader added.

Hot weather in the Southwest and nuclear power constraints stillprovided a modicum of support for prices at the Southwest,according to one marketer. But based on the screen’s late plunge,he expects Southwest basin numbers to be off about a dime today.The Southern California border market, though, should hold upbetter because of still-strong power generation load in the regionand a sizeable allocation restriction in Transwestern deliveries toSoCal Gas (see Transportation Notes).

Westcoast had a drafting tolerance of zero Wednesday but wasallowing leeway of up to 20% for positive daily imbalances. Despitethe indicator of below-target linepack, Sumas quotes joined theoverall softening with a drop of almost a nickel.

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