Friday’s start of a buildup to a near-nationwide heat wave during the weekend led to a strong launch of the August aftermarket. Prices advanced at nearly all points Thursday. The firmness was enhanced by the previous day’s 11.8-cent futures gain.
Across the board gains were averted by flat to about 15 cents lower quotes at three scattered points. Otherwise prices were down anywhere from a dime to a little more than 45 cents.
The Energy Information Administration fell short of consensus expectations at 69-70 Bcf when it announced a 65 Bcf addition to storage during the week ending July 25. Nymex traders were unimpressed, however, and pushed September natural gas futures 12.9 cents lower amid falling prices throughout the energy futures complex (see related story).
The Northeast will be spared to some extent from the broiling temperatures expected to engulf most of the U.S. going into the weekend, and consequently regional citygates recorded many of Thursday’s smallest gains (along with Iroquois Zone 2 being flat). According to The Weather Channel (TWC), after a mostly dry and very warm Friday, the Northeast can expect showers and thunderstorms to limit weekend highs to the 80s. Temperatures should stay a little below average Sunday, TWC said, but hotter air will return as next week goes on.
The brunt of the approaching heat wave will be borne by the South, Midcontinent, Midwest and most of the West outside the coast, Pacific Northwest and Western Canada. In the South high temperatures should reach the 90s to lower 100s with heat indexes of 100-115 degrees in all sections except Florida by Saturday, TWC said. The heat will recede a bit Sunday, “but it returns in full force Monday and Tuesday,” the forecaster added.
The hot weather will be equally oppressive in the Lower Midwest and Midcontinent areas. Highs should climb into the upper 90s to lower 100s over the weekend with heat indexes topping 110 degrees from the western Ohio Valley southwest to eastern Kansas through early next week, TWC said. “Another dangerous element to this heat wave will be the overnight temperatures. In the bigger urban areas like St. Louis and Kansas City temperatures may not dip below the 80-degree mark Saturday night, Sunday night and possibly Monday night.”
The Rockies racked up large gains based on localized cooling load, with Denver predicted to hit the century mark in temperatures Friday. However, San Juan Basin gains were relatively modest even with desert Southwest heat peaking in the low to mid 110s.
One source considered it something of a toss-up on calling Friday’s price direction. The bullishness of rising cooling load would be arrayed against the negative factors of prior-day screen weakness and the decline of industrial demand that accompanies a weekend.
Florida Gas Transmission’s ending of an Overage Alert Day led to declines at Florida Gas Zone 3 and the Florida citygate. But farther upstream Florida Gas Zones 1 and 2 realized increases.
Westcoast Station 2 dropped a few cents after the pipeline said it was ending a 40% raw gas constraint Friday at the Pine River Gas Plant (see Transportation Notes).
For an industrial end-user it was a fairly routine bidweek except for the huge price plunges. That “works for us,” he said.
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