Cooling load is increasing in the South and lows in the 30 and 40s were still in the forecast for Wednesday in much of the northern West through the Upper Plains into sections of the Midwest, Northeast and Eastern Canada. Yet the cash market still appeared to be sustaining a recent streak of gains at nearly all points Tuesday more on psychological factors than on any basis fundamental demand.
Northwest-South of Green River was the sole point to see a loss Tuesday, possibly due to a Declared Deficiency Period restriction through the pipeline's Vernal Compressor Station that will last through Wednesday (see Transportation Notes). Otherwise the market ranged from about a nickel to 30 cents or so higher.
Although May 1 -- a Friday -- saw only a small majority of points recording mostly small gains, so far May has not had a single trading day of overall softness.
After getting scant screen guidance from Monday's 0.9-cent decline by June futures, Wednesday's cash market will have sturdy support again after the contract rebounded by a fairly robust 14.7 cents Tuesday (see related story).
After being Monday's only softer point, the Florida citygate boasted Tuesday's second-highest gain as Florida Gas Transmission both extended an Overage Alert Day and tightened the imbalance tolerance (see Transportation Notes).
Some parts of the South such as Memphis, TN, and Little Rock, AR, had been relatively mild with mid 70s highs Tuesday, but they should have more air conditioners being turned on Wednesday with predicted peaks about 10 degrees higher, according to the Weather Central forecasting firm. The prediction of mid 80s temperatures extended into the lower Midcontinent. However, farther east Atlanta was expected to remain limited to the mid 70s.
Stormy weather along a cold front will keep the Midwest fairly cool, but little significant heating load is likely with Chicago due to continue approaching a high near 70. The Northeast will be even milder than the Midwest Wednesday, although the Midwest's cold front is expected to be entering the Northeast by the weekend and taking mercury levels a bit lower in the latter region.
The western forecast is little changed: very hot in the southern sections, moderate along the coast and cool to chilly from the Rockies through Western Canada.
Though the recent market firmness may have seemed to be in denial about abundant storage inventories, Southern Natural Gas may have jogged some memories Monday in reporting that as of last Thursday (May 7), working gas volumes at its two facilities stood at 40.1 Bcf out of total capacity of 60.0 Bcf, or about two-thirds (67%) full. That compares with 27.1 Bcf (45%) on May 8, 2008 and 35.6 Bcf (59%) on May 10, 2007, Southern said.
The National Weather Service predicts above-normal temperatures during the May 18-22 workweek throughout the Southwest to as far north as western Washington state and extending through most of the southern Pacific Northwest to as far east as western Colorado and New Mexico. The agency looks for below-normal readings in an area from South Texas throughout most of the South through southern North Carolina and extending northward through most of Tennessee to encompass most of the Midwest along with the Upper Plains.
Citi Futures Perspective analyst Tim Evans said in a Monday evening advisory he is looking for a storage injection of 94 Bcf to be reported for the week ending May 8, to be followed by builds of 88 Bcf and 110 Bcf for the weeks ending May 15 and May 22, respectively.
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