A dearth of cooling load in the East trumped futures support from last Friday in causing most points to continue falling Monday. However, nearly all of the West, which is where the lion’s share of 90-degree-plus weather is currently in residence, was joined by a few eastern points in ranging from flat to about 35 cents higher.

The majority of losses ran from a couple of pennies to about 30 cents. Sources saw little chance of a rally anytime soon at eastern points.

Tuesday’s trading will have essentially neutral futures guidance after the August contract fell by less than a penny Monday.

Sizzling heat will bake much of the West Tuesday with record or near-record highs likely as far north as Grand Junction, CO, according to The Weather Channel. Phoenix is forecast to hit 115 degrees Tuesday, while Denver is expected to peak in the mid to high 90s. One weekend price depressant for much of the West was eliminated when PG&E lifted a high-inventory OFO Monday after having upgraded it on Sunday (see Transportation Notes).

Otherwise the weather is generally too moderate to be supportive of gas prices. Even the South, which usually is well into the dog days of summer by now, will see very few areas getting as high as 90 degrees Tuesday.

Apparently the torrential rains and flooding that have occurred over the past week in Kansas, Oklahoma and central and northern Texas have had little impact on oil and gas production. Most of the Midcontinent flooding has been in northeast Oklahoma and southeast Kansas, and there is negligible gas production in those areas, said Michael Bernard, president of Mid-Continent Oil and Gas Association of Oklahoma. There has been lots of rain but no flooding in the Arkoma and Anadarko basins, he added.

Stacy Fowler with the Texas Railroad Commission said the commission’s Wichita Falls district office, which is in the area where most Texas flooding occurred, has gotten no reports of flood-caused production outages.

However, an Oklahoma producer said the weather is “definitely causing some problems drilling and completing wells.” He stressed that it has been “very difficult getting rigs in and out of sites and just getting to the wells to check on [them]. We try to build our sites a bit better to allow for this, but still with 20-25 inches of rain so far this year in some areas, it’s going to take quite a while to dry out.”

The producer said he expects Midcontinent prices to continue to weaken with mild weather forecasted in the region over the next six to 10 days.

A Texas-based marketer also perceived chances of a rally this week as slim to none. This is especially unlikely Tuesday, he said, when trading will be for two days and a holiday flow date is included. August futures were up a dime in after-hours trading Monday afternoon, but that likely will be unable to bolster the cash market, he added.

The market was very quiet Monday, the marketer continued, and probably will be even quieter Tuesday when everyone who isn’t already taking vacation will leave earlier than usual for the Independence Day holiday.

Monday was Canada Day north of the border. A Calgary-based producer said it is customary for Canadians who trade only at Canadian points such as NOVA Inventory Transfer or Westcoast Station 2 to take the day off, while those who trade at U.S. points work that day and join Americans in taking off for the Fourth of July.

A utility buyer in the South said his company is putting a little extra gas into storage during July, “then slamming on the brakes.” The utility has plenty of summer term gas contracted and will be close to filling its storage account by the end of the month, so it probably won’t be in the daily market for the rest of the summer, he said.

©Copyright 2007Intelligence Press Inc. All rights reserved. The preceding news reportmay not be republished or redistributed, in whole or in part, in anyform, without prior written consent of Intelligence Press, Inc.