The cash market remained in mild softening mode for the most part Thursday. Nearly all points ranged from barely a couple of pennies higher to down about a nickel, with small declines predominating. Transco Zone 6-NYC remained the price leader, but it recorded Thursday’s biggest drop of about 30 cents as traders anticipated a weekend cooldown. California also tended to see larger downticks than other markets.

However, several sources look for much greater softness to prevail in today’s activity, with a Midwest marketer predicting a “free fall” in cash numbers. The screen was one indicator with its downward momentum accelerating from Wednesday to Thursday, he said, but obviously the key factor is the approaching end of the deadly heat wave that has prompted power alerts and set records for high temperatures and power usage in many cities and states this week.

Even though Chicago, Detroit and Kansas City in the Midwest/Midcontinent, along with other major cities from the Northeast all the way to Texas, remained under heat advisories Thursday, the dangerous hot weather will be only a memory for much of that area by Saturday, the marketer said. A cold front has already brought the thermometer down to the 60s and 70s in parts of the Upper Midwest, he noted, “and it’s supposed to get below 80 this weekend in Chicago.”

The marketer added that his company was seeing “backdrafting” for September and October. He explained the term as meaning that people are withdrawing storage gas for current use because they figure on refilling it much more cheaply in the next couple of months.

A Gulf Coast source observed that Henry Hub cash has been maintaining at least a dime premium over the Nymex print recently, which indicates unusually strong physical demand at this point. “But the market has to have sustained two to three weeks’ worth of major heat to keep prices up,” he said. “Instead it’s just getting just five days or so of heat followed by about the same period of moderation. We’re seeing that now with the Northeast and Midwest due to cool off for weekend. The industry has been digesting that [kind of information] all along; that’s why the price outlook has turned generally bearish again even before this heat wave ends.”

Early this week Tennessee’s 500 Line was trading more than a nickel below the 800 Line when 500 Line maintenance forced much upstream production to seek out either the 800 Line or other pipes for transportation. However, the two trading points had close to essential parity Thursday. The 500 Line “was actually about 2 cents stronger than 800 at the end because 500’s maintenance constraints were starting to pinch the availability of supply there harder,” a marketer said.

Western markets remained rather “uneventful” even though the Denver conference had ended, returning a near-full complement of traders to their offices, one aggregator said. Stanfield recorded one of Thursday’s rare rises of more than a couple of cents due to warmer weather moving into the Pacific Northwest, he said. Although it came too late to influence cash trading Thursday, an intraday restriction of Kingsfield capacity (see Transportation Notes) may help keep Stanfield and possibly Sumas firmer than the overall market.

Although PG&E was projecting linepack near its minimum target levels for yesterday and today, there’s no way the utility would call a low-linepack OFO going into the weekend, contrary to some expectations, a citygate trader said.

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