A prior-day spike of 23.8 cents by August futures and expectations of hotter weather returning in some market areas by the end of the long weekend were able to trump the cash market impacts of offshore shut-ins continuing to dwindle and the extra loss of industrial load during a holiday period.

The result was higher prices at most points Friday. Although it wasn’t likely to have any significant effect, a low-pressure area centered just south of the Florida Panhandle may have contributed a bit to the general market bullishness.

All of the flat to about 15 cents lower averages occurred at western locations. Gains ranged from a couple of pennies to nearly 35 cents, with nearly all of those exceeding 20 cents being recorded in the Mid-Atlantic/Northeast. Highs in the mid to upper 90s were expected by Sunday in parts of that region, especially in the Mid-Atlantic.

Much of the Midwest also was due to see somewhat torrid conditions returning early this week. However, with the Rockies cooling off slightly, except for triple-digit highs continuing in parts of the desert Southwest much of the West will remain on the moderate to merely warm side.

The former Hurricane Alex had dissipated, although rain from its remnants was tending to depress peak temperatures from Texas through parts of the South, Midcontinent and southern Plains, according to The Weather Channel.

While helping boost Friday’s cash quotes with Thursday’s rally, August natural gas futures will provide negative guidance Tuesday after the contract retreated 16.7 cents on Friday to $4.687.

A weak nontropical low-pressure area associated with a frontal zone was in the extreme northeastern corner of the Gulf of Mexico, the National Hurricane Center (NHC) said Friday. It was expected to drift slowly toward the west-southwest or west but had only a 10% chance of becoming a tropical or subtropical cyclone during the following 48 hours, NHC added.

The agency did not expect any tropical cyclone formation elsewhere during that period. Citi Futures Perspective analyst noted a Frontier Weather report of one tropical wave in the western Caribbean and another in the central Atlantic, but Frontier agreed that no development of either was expected anytime soon.

Despite the pipeline issuing an Imbalance OFO (see Transportation Notes), Transco’s two Zone 6 pools in the Northeast rose about 30 cents each.

After issuing numerous Overage Alert Days in recent weeks due to high market-area heat levels and low linepack, Florida Gas Transmission (FGT) said there was a potential for it declaring an Underage Alert Day during the long holiday weekend due to a “high probability of rain” being predicted for Florida. FGT also said Friday its total linepack was slightly above target levels at that point. The Florida rain forecasts likely were associated with the low-pressure area near the state’s western coast. The Florida citygate saw one of Friday’s biggest declines of about 15 cents.

However, FGT also noted that “during the summer high temperatures and humidity can follow rainy weather. If this occurs, FGT may need to issue an Overage Alert Day to maintain reliable levels of linepack.

The restoration of offshore gas production that had been shut in due to Hurricane Alex continued Friday. The pace was picking up but remained rather slow. The Bureau of Ocean Energy Management, Regulation, and Enforcement (BOEMRE) said 30 companies had reported 694 MMcf/d in outages, or 10.84% of normal Gulf of Mexico gas output of 6.4 Bcf/d, by 11:30 a.m. CDT Friday. That was down from estimates of 877 MMcf/d a day earlier and 919 MMcf/d on Wednesday. The count of evacuated production platforms had dropped to 50 from 69 Thursday, while personnel had returned to two more mobile drilling rigs, leaving only four still unmanned.

From operators’ reports, BOEMRE estimated that 205,077 b/d, or about 12.82% of normal Gulf oil production, remained shut in.

On the Appalachian pipes, IntercontinentalExchange (ICE) reported that Columbia Gas volumes traded on its system were almost unchanged, with Friday’s 579,800 MMBtu up only 100 MMBtu from Thursday. However, Dominion-South tumbled precipitously from 814,100 MMBtu Thursday to 461,900 MMBtu Friday, ICE said. Despite the disparity in volume changes, the online system said both points recorded price increases of about 20 cents or so.

Although linepack was tending to rise late in the week, Kern River reminded shippers Friday that it was still low. On the other hand PG&E extended a high-inventory OFO through at least Saturday (see Transportation Notes), which was partially responsible for some of the western price weakness.

Due to low industrial demand associated with the holiday weekend market, a Midcontinent producer said his company didn’t do much trading Friday. However, he said it was able to take arbitrage advantage of regional pipe spreads, buying on one Midcontinent pipe and selling at a higher price on another.

The producer said there was no doubt that both upcoming heating demand and the bullish storage report that resulted in Thursday’s futures spike were chiefly responsible for firmer cash numbers Friday.

But, he added, he did see some storage buyers who “usually buy a lot of volume in our area.” Some of the bigger companies that hadn’t been asking the company for storage supplies in some time wanted to buy it for the weekend, he said; the producer thought they found the recent spread between Nymex and Midcontinent cash attractive.

Despite the futures downturn Friday, he expects hotter weather and the return of industrial load from the holiday weekend to keep the cash market rising at most points Tuesday.

Baker Hughes reported an increase of two to 960 in the number of drilling rigs searching for U.S. gas during the week ending July 2. After rising by one a week earlier, the Gulf of Mexico tally retreated by one to nine last week, while there was addition of three onshore units, Baker Hughes said.

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