Keying off mixed futures market activity on Friday, the cash market on Monday continued its recent trend of “following the screen,” recording a mixture of gains and losses across the country. While the East and West recorded mostly gains, some as high as half-a-dollar, the rest of the country’s regions produced a wide range of ups and downs.

Traders had been prepared for the unknown Monday after the September futures contract, which induced alternative up-and-down movement in cash quotes last week, had relatively neutral guidance for Monday’s trading by falling a scant 1.6 cents to $6.090 Friday.

With tropical storm activity still nonexistent, temperatures remain a key indicator for cash market prices. However, despite below-normal readings in California, the West showed price strength throughout Monday’s trading.

“AECO was trading around $4.80 and the PG&E Citygate around $5.95 to $6,” said a West Coast gas trader. “Everything was up on Monday across the board. Cash is still following the futures market. It is tough to say right now what the overall direction is. We are doing a little bit of business, but not too much.”

The trader added that the storage situation continues to tighten as inventory continues to swell. “Things are pretty full,” he told NGI. “We are getting toward the end of the season. The weather remains unsupportive of prices in the West. Temperatures are down everywhere. From what I can tell, everything from the West Coast through the Southwest appears to be a bit below normal. That’s not helping gas demand levels at all.”

According to meteorologists at AccuWeather.com, a strong onshore flow sliced into the heat across the interior of California on Sunday, allowing Sacramento to produce its “coolest high temperature ever” for the date of Aug. 5, topping out at only 76 degrees.

The Northeast saw most points gain 12 cents or more, with Iroquois Zone 2 picking up nearly 50 cents on Monday to average near $7.40. Transco Zone 6 New York gained 39 cents to average $7.17. However, unlike out west, the weather picture backs up the gains recorded in the Northeast.

“The dangerous heat that has spread from the Ohio Valley to the Southeast will reach the Northeast on Tuesday, but not before storms develop from New England to the Carolinas,” meteorologists at AccuWeather.com said Monday. “The east regional news reports high temperatures on Tuesday will reach into the 90s in most areas of the Northeast, with the exception of upstate New York and northern New England. Temperatures in the major urban centers along the I-95 corridor could top 100 degrees, while increasing humidity will create RealFeel temperatures that will feel even hotter.”

AccuWeather.com added that the heat will be even more intense across the Southeast and parts of the Plains and Midwest. The Severe Weather Center reports heat advisories are in effect across much of the interior of the Carolinas and Georgia.

Commenting on Monday’s activity in futures, one Northeast trader warned that more gains could be seen in Tuesday’s cash market. September natural gas futures gained 11.8 cents Monday to close at $6.208. “With how well the recent relationship between cash and futures has been, I wouldn’t be surprised to see a little bump higher in market action Tuesday,” the trader said.

On top of the searing heat in the Southeast and south central portions of the country, the Gulf Coast region is also dealing with some gas movement issues. Updating its force majeure declared Friday due to an unplanned outage (see Daily GPI, Aug. 6), Southern Natural Gas Co. (SNG) said Monday that damage assessments continue on its affected offshore facilities and that the force majeure remains in effect upstream of Toca. Southern’s Gate 6 platform offshore Louisiana has seven supply lines operated by three parties feeding into the platform and three Southern-operated lines leaving the platform.

“Pipeline inspections continue utilizing scanning equipment and divers,” the company said. “We expect to complete the assessment of one of the three SNG lines leaving the Gate 6 platform later [Monday]. Until the integrity of Southern’s system upstream of Toca can be assured, Southern can not accept receipts upstream of its Toca Compressor station. Shippers are encouraged to fully utilize their storage withdrawal rights.”

©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.