Relatively moderate heat levels in the Mid-South and Northeast, along with mild to cool forecasts for Canada, the Pacific Northwest and sections of the Midwest, failed to prevent a large majority of locations from realizing small price gains Tuesday. However, inland California was beginning to join much of the desert Southwest in anticipating highs ranging from the mid 90s to more than 110, and the Rockies — while still fairly moderate — had predicted peak temperatures start to climb into the low 80s.

Losses occurred at only two points. The rest of the market was flat to up about a dime, with Transco Zone 6-New York claiming the top increase. But despite a smaller uptick of about a nickel, Iroquois Zone 2 averaged a few pennies higher than the Transco pool and was the only point with a high-end quote of slightly more than $5.

A July futures rise of 0.8 cent Monday provided a smidgen of bullishness to Tuesday’s physical market, but the Nymex contract will have stronger guidance for cash traders Wednesday after moving another 7.1 cents higher (see related story).

The Atlantic tropical scene remained quiet.

Market-area weather was expected to be hot enough Tuesday that Florida Gas Transmission issued an Overage Alert Day (see Transportation Notes). The pipeline’s three production-area zones recorded gains of 3-5 cents or so.

Despite a much-needed chance of thunderstorms in the Houston area being predicted to drop the local high into the upper 80s Wednesday, Houston Ship Channel quotes rose about a nickel after falling 7 cents a day earlier. However, IntercontinentalExchange (ICE) said Ship Channel volumes traded on its platform were down from 190,400 MMBtu Monday to 176,400 MMBtu Tuesday. But at the flat nearby Katy Hub, ICE trading jumped from 386,000 MMBtu to 510,300 MMBtu.

Lost production from shut-ins caused by intentional flooding of the Atchafalaya Basin in South Louisiana last month (see Daily GPI, May 17) continues to trickle back online at a snail’s pace, according to the state Department of Natural Resources (DNR). It said that as of Monday 30.70 MMcf/d was still being reported as shut in, down less that 1 MMcf/d from the 31.54 MMcf/d peak reached about two weeks earlier. DNR also had reports of 3,192.4 b/d of oil output remaining offline Monday.

However, in a related note Southern, in what it called its final Mississippi River flood update, Monday said floodwaters were continuing to recede from the previously posted areas of its system. Southern added that it was continuing to work with South Louisiana producers to restore flow upon request at impacted facilities, and said three receipt points had recently become available for flow again but five more remain out of services (see the bulletin board for lists).

And in other flooding events, a Midwest utility buyer said he still had not heard any news about regional gas operations being impacted by the Missouri River flooding. However, the high-water problems are going to go on for a long time, he added, because the Army Corps of Engineers already has said it will keep the upstream floodgates open through most or all of August due to rainstorms and heavy mountain snowmelt from the Upper Plains.

The buyer said he was not being offered any fixed prices for bidweek yet but had picked up some July gas at Northern Natural-demarc mostly at index around flat.

While other parts of the Midwest to the south and west are getting cooler, a marketer in the upper reaches of the region said it remained humid and warm in her area, with Tuesday’s highs in the low 80s predicted to repeat Wednesday. That meant there was a little gas being used for cooling purposes there, but her company was mostly buying small amounts of spot gas for clients’ storage injection needs instead. For now it’s trying to avoid delving into the spot market as much as possible until prices get lower, she said.

Canaccord Genuity analysts said there’s some near-term weather bullishness for prices, but not so much later on. An ongoing heat wave should drive cooling demand in the Northeast, Southeast and South-Central regions to about 20% above seasonal norms through the end of the week. “Combined, these regions constitute nearly 60% of the country’s gas-fired generation, thus keeping a bid underneath gas power demand over the next couple of days,” they said. “Forecasts looking out to next week, however, suggest temperatures should revert to normal or even slightly below normal through the end of the month.”

Stephen Smith of Stephen Smith Energy Associates revised upward his estimate of the storage report for the week ending June 17 from an original injection estimate of 84 Bcf to 93 Bcf. IAF Advisors analyst Kyle Cooper said he anticipated a 90 Bcf build.

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