What started out as a promising sign of a move toward $3 for natural gas futures Tuesday morning eventually fizzled by midday, even as weather models maintained hotter trends for the coming weekend over the U.S. Midwest and East. The Nymex July contract settled at $2.939, down 1 cent on the day.

Spot gas prices were mixed as sweltering heat is expected to dominate the central and southern United States this week, with high temperatures in upper 80s to 100s making for strong demand in those regions. The NGI Spot Gas National Average slid 4 cents to $2.63.

Nymex July gas futures opened the session at $2.954 and traded as high as $2.988, but then failed to break out of key resistance levels that have been in play already three times this month. The prompt month fell as low as $2.917 but regained some ground before the close.

“Unless forecasts continue to trend significantly higher, resistance is likely to hold,” EBW Analytics CEO Andy Weissman said.

As for the latest weather model runs, the data has trended hotter for this weekend into early next week as a warm ridge sets up over the Midwest and Mid-Atlantic to add several Bcfs in demand as highs reach the upper 80s to lower 90s from Chicago and across the Ohio Valley, according to NatGasWeather.

The pattern late next week still looks comfortable across portions of the northern and eastern United States for neutral national demand and where slightly cooler trends have showed up in recent runs over the East, the forecaster said. “However, we still expect the hot southern U.S. upper ridge to gain strength June 24-28, which would result in highs of 90s and 100s expanding over most of the southern central U.S., with also some coverage of 90s into portions of the northern U.S.”

The issue is exactly how hot and how much of the Midwest and East will see 90s during the last week of June as the weather data struggles to resolve exactly where the core of the heat dome will set up. “The pattern the last week of June and the first week of July will be very important and right now it looks to be very warm, but potentially not quite hot enough in enough of the data over the East to take out strong resistance of $3 on front months,” NatGasWeather said.

Meanwhile, countering the bullish nature of forecasted heat is the potential for a sizable decrease in the year-over-year storage deficit when the Energy Information Administration issues storage figures, Mobius Risk Group said. Market expectations are for an inventory report in the mid to upper 90s Bcf, which would be roughly 2 Bcf/d larger than the same week last year.

“Reductions in the year/year storage deficit (800 Bcf) have recently caused tests of downside price support, and with the market net long 193,000 contracts, sidelined bears may be looking for re-entry opportunities. Looking ahead, there is the potential for a three- to four-week stretch of similar data points,” analysts said.

Inventories stood at 1,817 Bcf as of June 1, and thus “an average injection of 73 Bcf per week would be needed in order for storage to reach the 3.5 Tcf mark ahead of the winter withdrawal season,” Mobius said. Over the 23-week period from June 8-Nov. 2 last year, weekly injections averaged 53 Bcf.

A simplistic view suggests each week would need to be 3 Bcf/d loose to the prior year’s comparable injection to reach the 3.5 Tcf threshold. As a result, “this Thursday’s storage report should not be considered a bearish indicator unless the injection is larger than 103 Bcf,” Mobius said.

Meanwhile, the U.S. neighbors to the south have their eyes on Hurricane Bud, which had weakened to a category three storm by midday Tuesday, according to the National Hurricane Center. Bud is moving toward the northwest near 3 mph (6 km/h). A slow north-northwestward motion is expected through Thursday. On the forecast track, the center of Bud will be approaching Baja California Sur on Thursday and near or over Baja California Sur on Friday.

Maximum sustained winds had decreased to near 115 mph (185 km/h) with higher gusts as of the Hurricane Center’s 3 p.m. CT update. Further weakening, possibly rapid at times, is expected during the next 48 hours, and Bud is forecast to weaken below hurricane intensity by Wednesday night. The storm, however, is forecast to remain a tropical storm when it approaches Baja California Sur on Thursday.

Bud is expected to produce total rain accumulations of 3 to 6 inches across much of southwestern Mexico, with isolated maximum amounts of 10 inches through Thursday.

Back in the United States, spot gas markets were lower as the northern U.S. is expected to see numerous weather systems track across the region with showers and slightly cool conditions, with highs mainly in the 60s to 80s for light heating and cooling demand, NatGasWeather said.

Temperatures out West are forecast to start climbing with highs eventually reaching the 80s to 100s by Friday before cooling off for the weekend.

In California, Malin spot gas plunged 13 cents to $2.47, while PG&E Citygate managed to pick up a penny to reach $3.02. SoCal Citygate was down 1 cent to $3.37.

Over in the Rockies, spot gas at the Cheyenne Hub traded at $2.46, down 12 cents on the day. Northwest-Wyoming Pool was down 15 cents to $2.36, while CIG was down 15 cents to $2.37.

The steep price declines that occurred in Tuesday trading came despite a drop in Rockies supply. Genscape said a drop of nearly 400 MMcf/d day/day at the Lancaster meter has taken a chunk out of Rockies production. This location represents receipts onto Colorado Interstate Gas (CIG) from the Lancaster processing facility operated by Anadarko Petroleum in Weld County, CO.

After averaging 384 MMcf/d in the previous two weeks, Monday’s volumes dropped to 26 MMcf/d. Early cycle data on Tuesday showed a receipt of exactly 0. A representative for CIG confirmed to Genscape that this reduction was due to “customer activity”, not a constraint on CIG’s side; Anadarko had not responded to request for comment.

Three other meters in the Denver-Julesberg Basin also posted noteworthy day/day declines in early cycle data for Tuesday, totaling a loss of another ~190 MMcf/d, according to Genscape. One of these three, the Platte Valley (Narco to CIG) location, is usually inversely correlated with the Lancaster meter – when receipts at one drop off, receipts at the other pick up, Genscape analyst Joe Bernardi said. “But this Platte Valley point has actually done the opposite following the recent Lancaster nom decrease, declining 108 MMcf/d day/day. Two other Weld County receipt points from DCP Midstream onto CIG also dropped a combined 50 MMcf/d day/day,” he said.

Over in Appalachia, the effects of last Thursday’s explosion on Columbia Gas Transmission’s (TCO) Leach XPress continue to be seen as Genscape reported that Columbia Gulf Transmission’s supply from the Gulf Leach interconnect has fallen dramatically as a result of the force majeure that went into effect following the incident.

Gulf Leach is Columbia Gulf’s single largest supply point, accounting for up to 53% of its total supply, but receipts at the interconnect have fallen by 1.18 Bcf/d since the force majeure was declared. “Receipts from other locations have risen in partial compensation, but overall receipts are still down 693 MMcf/d from the week prior to the explosion,” Genscape natural gas analyst Josh Garcia said.

Next-day gas at Columbia Gas slipped a penny to $2.79, while Dominion South dipped 3 cents to $2.23 and Tennessee zone 4 Marcellus lost a penny to hit $2.00.

Over in the Northeast, Millennium East Pool fell 2 cents to $2.06 as a pair of maintenance events were set to begin Tuesday on the pipeline. Pigging along Millennium’s Holding Point lateral was previously expected to have a ”low’ expected impact to transportation services, according to Genscape.

On Monday, however, the pipeline posted a critical notice stating they now expect Holding point volumes could be impacted by as much as 30% during this planned event. Capacity at Holding Point has been reduced to ~240 MMcf/d, down roughly 100 MMcf/d from a previous operating capacity of 343 MMcf/d.

Capacity is expected to remain restricted for the duration of the event, which is scheduled to last through Thursday’s gas day. This operating capacity reduction only represents a 63 MMcf/d decrease in scheduled deliveries from Millennium to Dominion Transmission, Genscape analyst Allison Hurley said.

Millennium also was set on Tuesday to start annual inspections and electrostatic discharge testing at its Corning compressor station. The maintenance is expected to last through Sunday. Timely cycle delivery nominations to Empire (at meter 640167) for Tuesday remained flat day/day, Genscape said.

“While this event should be be largely unimpactful, during similar maintenance last June (June 6-12, 2017), deliveries at this meter fell roughly 30% for a single day (June 7, 2017). This drop was due to “unforeseen circumstances” and “issues on interconnects,” as cited in Millennium’s related notice. Genscape will continue to monitor nominations during this event and post any updates as necessary, Hurley said.