With a wee bit of help from prior-day screen firmness, gradually growing demand for power generation gas supplies to keep air conditioners running caused most cash market locations to realize substantive increases Tuesday. Even though odds of a Bay of Campeche low-pressure area becoming a named tropical storm didn’t get raised to 90% until well into the afternoon, just the chance of that happening so early in hurricane season may have been a modestly bullish factor to some traders.

Flat quotes at the two Arizona/Nevada points and a small drop by the SoCal citygate missed the boat on overall increases ranging from 2-3 cents to about a quarter. Northeast citygates tended to see most of the larger gains.

July futures went off the board with a show of muscle in rising 10.1 cents to $4.357 (see related story).

The National Hurricane Center (NHC) said that with upper-level winds expected to become more conducive for development, a low-level circulation associated with a broad area of low pressure over Mexico’s Bay of Campeche had potential to develop into a tropical depression later Tuesday or on Wednesday. As of Tuesday morning NHC was giving the system, designated as 95L, a 50% chance of becoming a named tropical cyclone within 48 hours, but it upgraded those odds twice in the afternoon: to 70% and later to 90%. Although 95L’s slow west-northwestward movement was still expected to have it affecting primarily eastern Mexico, the system conceivably could get close enough to the southern tip of Texas to affect a few platforms along the state’s lower Gulf Coast.

According to analysts with Canaccord Genuity, it would take a heck of a lot of storm disruption to Gulf of Mexico (GOM) production to really matter much to the gas market. Acknowledging that this year’s hurricane season is expected to be slightly more active than normal, they contended that the market “appears to be paying little attention as GOM gas production now constitutes less than 10% of U.S. dry gas output and minor disruptions could be fairly easily backfilled with idled LNG capacity.”

Although Northeast peak temperatures are only creeping higher (but about to reach the mid to upper 80s in such urban areas as New York City and Philadelphia), Tennessee reinstated an Imbalance Warning for its two farthest downstream market-area zones that mildly encourages customers to run positive imbalances (see Transportation Notes). The day’s biggest gain occurred at Tennessee Zone 6, while Tennessee Zone 5 was up about 15 cents.

Highs from the lower 90s through about 100 have become commonplace and are expected to continue in the South through Oklahoma and Texas, and continuing westward they are forecast to reach the upper 90s and low 110s in such desert Southwest locations as Las Vegas and Phoenix, respectively. Even Cheyenne, WY, and Denver are expected to hit the low to mid 90s Wednesday, Weather Central said. However, the West Coast (including inland California) through the Pacific Northwest into Western Canada will stay moderate to cool for a bit longer before starting to see above-normal temperatures over the holiday weekend.

Sections of the Midwest are expected to have either static or slightly rising mercury readings that will be limited to the mid 80s or lower.

The issuance of a high-linepack OFO for Tuesday by SoCalGas came too late Monday afternoon to impact that day’s cash trading (in which the SoCal citygate saw one of the biggest gains at 21 cents), but the OFO’s continuation through Wednesday led to the citygate being Tuesday’s only softer point.

With constraints being lifted at the Pine River Gas Plant (see Transportation Notes), Westcoast said its linepack was starting to grow above desired levels.

A marketer in the Upper Midwest said the area is forecast to get a little hotter toward the weekend but was “pleasant” Tuesday afternoon. She said her company bought July baseload at last-day settlement basis of plus 23 cents into Consumers Energy and plus 20 cents into MichCon. She thought capacity restrictions helped Consumers regain a small basis premium this month; relative basis positions between the two Michigan citygates “have bounced around” in the last year or two but generally MichCon has run slightly higher.

The screen’s settlement day strength helped lift bidweek numbers Wednesday, IntercontinentalExchange (ICE) indicated. The Opal Plant tailgate averaged $4.01 on the ICE platform Monday but was up to about $4.10 Tuesday. Similarly, Waha rose from $4.22 to just shy of $4.30, ICE said.

IAF Advisors analyst Kyle Cooper looks for an 81 Bcf storage injection to be reported for the week ending June 24, while Stephen Smith of Stephen Smith Energy Associates said he also projects an 81 Bcf build, up from his earlier estimate of 78 Bcf.

Citi Futures Perspective’s Tim Evans checked in with a slightly higher expectation of 83 Bcf, to be followed by additions of 78 Bcf, 62 Bcf and 66 Bcf for the weeks ending July 1, July 8 and July 15, respectively.

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