Both physical gas for Wednesday delivery and nearby futures pirouetted higher in Tuesday's trading as forecasts of summer-like temperatures across the country, a supportive power price environment and government estimates of higher natural gas prices all joined forces.

Eastern points saw the greatest increases, with averages there jumping well over a quarter, but double-digit gains across all market points were common. The overall spot market price jumped 19 cents to $2.62. July futures gained a stout 14.1 cents to $2.846, and August was up by 14.1 cents as well to $2.878. July crude oil joined the move higher, adding $2.00 to $60.14/bbl.

Weather forecasts across the country showed pervasive warmth. predicted that the high in Boston Wednesday would reach 82 degrees, and Chicago's peak was anticipated to reach 87. The high in Dallas was seen at 96, and Phoenix's maximum was also predicted to reach 96.

Gas at the Algonquin Citygates roared ahead by $1.01 to $2.56, and Wednesday deliveries to Iroquois Waddington rose 33 cents to $2.97. Gas on Tennessee Zone 6 200 L added 80 cents to $2.60.

In the Mid-Atlantic, gas bound for New York City on Transco Zone 6 rose 23 cents to $2.99, and deliveries to Tetco M-3 added 16 cents to $1.61.

Gulf Coast points made stout double-digit advances as well. Gas on ANR SE rose 15 cents to $2.77, and deliveries to the Henry Hub tacked on 14 cents as well to $2.81. Parcels on Tennessee 500 L rose 12 cents to $2.79, and gas at Katy changed hands 18 cents higher at $2.82.

Other market centers were also higher. Gas at the Henry Hub the Chicago Citygate jumped 16 cents to $2.78. Gas delivered to El Paso Permian was quoted 23 cents higher at $2.68, and deliveries to the PG&E Citygate were up by 12 cents to $3.15.

Next-day power prices gave gas buyers for power generation some additional incentive to make incremental purchases. Intercontinental Exchange reported that peak power Wednesday at the ISO New England's Massachusetts Hub rose $7.42 to $33.84/MWh and on-peak power at the PJM West terminal was quoted $4.37 higher at $42.42/MWh.

Adding its own impetus to the case for higher prices was a revision by the Energy Information Administration (EIA) to its 2015 forecast to $2.97/MMBtu, up 4 cents from the May forecast (see Daily GPI, June 9).

EIA's price forecasts have been on a general downward trend for some time. Last month, EIA said it expected Henry Hub spot prices to average $2.93/MMBtu this year and $3.32/MMBtu next year, down 14 cents and 13 cents, respectively, from the previous month forecast (see Daily GPIMay 12). As recently as December, EIA estimated that Henry Hub spot prices would average $3.83/MMBtu in 2015, a full 90 cents higher than the latest forecast (see Daily GPIDec. 9, 2014).

Futures traders are standing aside for the moment. "Much of [Tuesday's] price spike was attributable to the same production impetus that drove oil prices higher as yesterday's EIA productivity release conjured up ideas of a much slower pace of output growth than previously expected," said Jim Ritterbusch of Ritterbusch and Associates after the market closed. "Some current hot temperatures across the Midcontinent combined with forecasts for above normal trends across much of the country next week also provided some bullish ammunition.

"Gains were accentuated by some alteration in the chart picture as the market managed to lift above the $2.82 resistance level. Looking ahead to tomorrow, we will expect some price consolidation within about the upper half of today's trading range before the EIA report offers additional guidance. Our expected 109 Bcf injection is much in line with a year ago but will likely fall toward the low side of industry ideas. As a result, this rally could see further extension toward the $2.91 area by week's end. We suggested a shift to the sidelines in this morning's comments and off of a short-term bearish stance for now. Although last week's price decline missed our downside target of $2.50 by about 6 cents, subsequent price action reinforced our opinion that the bulk of the coming month's trade will be developing within the $2.50-3.00 zone with the market seeing some wide swings in both directions."

Short term futures traders were somewhat circumspect about the day's advance. "We are still in a range," said a New York floor trader. "We bounced off the low end of the range a couple of days ago, and now its just working its way back to the upper end. We are in the upper-middle portion of the range, and maybe it has another leg up tomorrow, and we'll see how it acts once it reaches the $3 area.

"I don't see anything that's going to justify its movement [past $3]. It's a little warmer, but still open-window weather. This is still sideways market movement."

Weather forecasters are calling for increased warmth. "[Tuesday's] six-10 day period forecast is generally warmer than the previous forecast across a good portion of the nation, except the Northwest," WSI Corp. said Tuesday morning. "Period PWCDDs are up 4.7 to 51.6 for the CONUS, [and] forecast confidence is average today as medium-range models are in reasonably good agreement and fall into reasonably good agreement with a PNA [Pacific North America] pattern."

Risks to the forecast include the possibility that the northwestern U.S. might turn cooler under a negative PNA.