"Summertime, and the livin' is...way too hot," would likely be how George and Ira Gershwin would revise their classic for contemporary times. But despite a heat wave continuing to envelop several market areas, prices retreated to either side of flat in most cases Tuesday and even saw some dives at the previously high-flying Northeast citygates.
Even with help from the previous day's gain of 8.3 cents by August futures, a plethora of cooling load was unable to prevent the cash market from falling back to nearly unchanged for the most part, and a heat spurt in the Northeast was so short-lived that regional citygates saw sizeable losses.
Outside the Northeast flat quotes were very common amid single-digit gains that ran as high as about a nickel. Losses ranged from 2-3 cents to nearly 35 cents, with Transco's Zone 6-New York pool leading the way down.
It didn't provide much support Tuesday, but the screen will still have some positive guidance for the cash market Wednesday after rising another 4.5 cents (see related story).
The National Hurricane Center was still looking at two tropical waves Tuesday morning in Central America and off the northern South America coast that it considered as having near-zero chances of development. And sure enough, by that afternoon it was reporting "no tropical cyclones at this time" along with a blank Atlantic Basin map.
The temperature outlook was mixed, but it was in the key northern market areas where most of the drawback in high temperatures is occurring. Following a brief sojourn into the extra-warm low 90s, a significant cooldown is in store for the Northeast, with Boston expected to sink from around 90 to the low 80s and New York City due to retreat from above 90 into the mid to upper 80s. The Midwest is also experiencing a dramatic reduction of temperatures, with Chicago expected to peak only around the mid 70s Wednesday.
Tell that to the folks down South, where highs from the low 90s to either side of 100 will still be prevalent from the Southeast through much of the Midcontinent into the desert Southwest. However, the Rockies will be pulling back from highs around 90 into the low to mid 80s, while the West Coast and Western Canada continue playing it cool.
Heat appearances can be deceiving. For instance, while CenterPoint's bulletin board indicated only 91 degrees in Houston at mid-morning Tuesday, it said the 58% humidity yielded a "real feel" reading of 113. That likely was a factor in the Houston Ship Channel recording one of Tuesday's top gains, although it was only about a nickel.
No new major pipeline restrictions were added to PG&E's ongoing series of high/low-inventory OFOs with a continuing 10% tolerance for imbalances in either direction.
A Rockies producer applauded Chesapeake Energy's $1 billion program to invest in gas demand-inducing projects (see Daily GPI, July 12), saying it has the "right idea" in trying to increase use instead of focusing on more production. Major producers like ExxonMobil should be getting behind it, he said.
Otherwise the market is kind of in the doldrums right now, he said, adding that it's warm but not especially hot in the Rockies.
A Florida buyer agreed that it's gotten pretty quiet in her market neighborhood. The state still has lingering showers from last week's low-pressure area passing over Florida dampening demand for gas-fired power generation, she said.
Credit Suisse analyst Stefan Revielle weighed in with a 79 Bcf estimate of the storage injection for the week ending July 8. Stephen Smith of Stephen Smith Energy Associates said he also looks for an injection of 79 Bcf, down slightly from an earlier 81 Bcf estimate.
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