The bearish storage report Thursday and associated screen decline, along with forecasts of flagging weather-related demand and the weekend’s typical dropoff in industrial load, had traders anticipating a soft market Friday, and that’s exactly what they got.

Except for some flat to marginally higher points in the Rockies/Pacific Northwest, weekend price losses ranged from about a nickel to nearly 35 cents. A large majority of the declines were in double digits.

Cold fronts accompanied by widespread rainstorms were expected to keep most of the East experiencing below normal thermometer readings through the weekend and into early this week, which likely would limit or erase any post-weekend rally Monday. Only the Rockies area was expected to see any significant rise in heat levels; i.e., Denver’s high was forecast in the mid 70s Friday and was projected to rise to the high 80s Saturday.

The Waha/Permian Basin market, which had seen some of the week’s greatest strength through Thursday, led the price trek downward Friday as intrastate Texas load tended to diminish a bit. However, the fuel buyer at one Texas utility said he was still seeing “pretty strong generation load” and affirmed that his company had gas-fired units running. His gas prices were down about a quarter for the weekend, but he expected a “pop back up” Monday.

Chicago had the Midwest’s weakest citygate numbers by far, but strengthened near the end of trading, not just because of screen influence but also on its own merits, a producer said. There was some stranded transport to Chicago at first, he said, but then the basis spread from the production area widened out enough to induce extra flows when people realized they could cover variable transport costs.

Noting that Florida Gas Transmission had reverted to a 25% tolerance of negative imbalances for its Overage Alert Day notice Friday after setting a much more stringent level of 5% Thursday (see Transportation Notes), a Florida utility buyer said she would have to guess that “somebody must have decided to pull a lot of gas off the pipe” Thursday. She added that she wished FGT would just go ahead and issue customer-specific OFOs “instead of subjecting everybody to Overage Alert Days.”

“Clearly, the July 4th effect was not present in last week’s number,” Citigroup’s Kyle Cooper said in his Thursday afternoon analysis of the storage report. “However, possibly a decent number of businesses closed on July 2nd which we did not know about. The July 2nd report could simply remain an aberration. This [most recent] report was 1 Bcf above our upper end [97-107 Bcf prior estimation], so it is not considered overly surprising.

“However, the last two reports together are quite surprising and that clearly makes [the upcoming] report incredibly important. If next week’s injection is in the mid-to-upper 80[s] Bcf range, it will be considered very bearish. If the build for the week ending July 16 is even in the mid 70[s] Bcf range, it will still be considered slightly bearish from a temperature-adjusted standpoint.”

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