Much like the preceding two weeks, the cash market got off to a strong start Monday. A tropical storm near the northern Bahamas posed essentially no threat to offshore gas, but continuing predictions of hot weather in most of the United States and parts of Canada, along with the previous Friday's spike of 16.8 cents by prompt-month futures, were plenty bullish to cash traders.
The restoration of industrial load from its normal weekend decline was an additional, albeit minor, supportive factor.
A few scattered instances of flat quotes were exceptions to overall gains ranging from a little less than a nickel to a little more than 60 cents. Not too surprisingly, the Northeast again led the ascent with most of the biggest increases, despite storm fronts predicted to extend westward from the lower Northeast through sections of the Midwest. The weakest move higher occurred in Western Canada.
August futures were mildly softer in early trading, but for a while it looked like they might again give next-day support to cash prices after rallying into mildly positive territory. It was not to be, though, as they later fell back to flat on the day (see related story).
Atlantic tropical activity heated up a bit over the weekend with the Sunday formation of Tropical Storm Bret. As of early Monday afternoon Bret was well off Florida's east coast north of the northern end of the Bahamas and moving slowly toward the north-northeast with a gradual increase in forward speed expected, the National Hurricane Center said. There was no threat to Gulf of Mexico production; rather, the primary market effect, if any, could be some dampening of cooling load from rain along the Eastern Seaboard. Even that was unlikely as Bret's projected tracking would keep the center far off the U.S. coast, and a tropical storm's heaviest rains and highest winds tend to be on the northern and eastern sides.
Tropical storm warnings were discontinued Monday afternoon for Grand Bahama Island and the Abaco Islands.
Highs in the 90s, and from 100 to the low 110s in some cases in such as parts of Texas, Oklahoma and the desert Southwest, will remain prevalent Tuesday across much of the U.S. Even Winnipeg, MB, is expected to top 90, said the Weather Central forecasting service. About the only areas likely to be limited to the 70s and 80s are the West Coast, Pacific Northwest, New England, Eastern and Western Canada, and a few locations in the Midwest.
SoCalGas ended a two-day high-linepack OFO Sunday, and prices at both the Southern California border and SoCal citygate rose about 20 cents or so. But IntercontinentalExchange reported that while border trading on its system rose from 566,200 MMBtu Friday to 618,100 MMBtu Monday, citygate volumes retreated from 447,300 MMBtu to 407,900 MMBtu.
A high-linepack OFO implemented last Wednesday by Westcoast remained in effect, but the pipeline said its linepack was trending toward lower levels Monday. Still, Westcoast Station 2 was among the few flat trading locations.
With Transco's Zone 6-New York pool commanding the day's biggest increase and Henry Hub rising only about a dime, their basis spread exploded to around 85 cents after having been only 33 cents Friday.
Although other parts of Texas were due to peak around 100 Tuesday, a much-hoped-for chance of thunderstorms in the Houston area had lowered previous high forecasts to the low 90s Monday and Tuesday. That tended to limit Houston Ship Channel and Katy Hub numbers to increases of only about a dime and 15 cents, respectively.
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