Moderating temperatures in the Midwest and parts of the Northeast caused most points to drop anywhere from about a nickel to a little more than a quarter in Thursday’s launch of the July aftermarket. But above normal temperatures forecast for Friday and Saturday in much of the West allowed many (though not all) points in that region to record fairly strong gains ranging from about 15 cent to around 35 cents.

Screen weakness Thursday and the advent of a long holiday weekend are expected to unite the entire market in further softness Friday, although one trader suggested that persistent high heat levels in the South, Midcontinent and southern half of the West may limit the price downside.

The Energy Information Administration threw a little extra bearishness into the market mood by reporting a 92 Bcf storage build for the week ending June 24. The volume was within the range of prior expectations but near the high end, surprising some who expected that high power generation load amid widespread hot weather that week would limit the injection potential. August natural gas futures fell a little more than a dime in the second day of their prompt-month reign.

A producer said Gulf Coast-Northeast basis spreads tightened from about 70 cents early on to as low as about 55 cents as trading proceeded, although he thought they averaged 60 cents or so Thursday. “You’d expect screen weakness today and the long weekend” to keep cash prices falling Friday, he added, but hot weather forecasts for the July Fourth weekend may keep price declines small.

A marketer also anticipated more softness, but observed that “some people will see buying opportunities as prices keep dropping. Temperatures are declining in the Midwest and the region should stay mild all weekend, he said, noting that both the Chicago and Detroit metropolitan areas are predicted to see highs dipping from around 90 degrees Thursday to the 80-degree area Friday. “The Northeast doesn’t look all that hot” with temperatures already in the 80s, but power generation demand remained fairly strong there, he said.

The marketer was not aware of anybody still trading July baseload Thursday. Bidweek prices were moving steadily downward during the three-day futures expiration period, he said, which he thought made many traders want to complete their sales as soon as possible. As futures kept probing lower, Chicago citygate basis moved from minus 6 cents early to as strong as plus 15 cents offered late, he said.

The general western price strength defied continuing issues with excess supplies. Although PG&E did not issue an OFO, it projected linepack rising above its maximum target levels from Friday through Sunday. And Kern River, while saying it did not have to cut nominated volumes Thursday (see Transportation Notes), was still reporting high linepack in all segments.

Permian Basin-Waha numbers were down sharply despite intrastate Texas load remaining heavy with high temperatures staying in the 90s and 100s throughout the state. One source pointed at El Paso-San Juan quotes, which saw the day’s biggest gains, and said the fact that El Paso reported completing maintenance on a Bondad Station turbine and raised station capacity by 135 MMcf/d Thursday may have caused a shift in volumes from Permian/Waha.

Many Canadian traders were doing deals for flow through Tuesday because of the Canada Day holiday Friday and the U.S. Independence Day holiday Monday.

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