While declines continued at most points, the cash market was relatively stronger on Wednesday as the drops were smaller than the ones on Tuesday in nearly every case. The day also recorded a few more points than before showing moderate upticks.
Most losses were in single digits as they ranged from 2-3 cents to about 20 cents, and flat performances were common. The Rockies again stood out from the overall market with increases of up to half a dollar as they continued to make up for lost ground after being left out of the solid post-weekend gains at all other points Monday. Non-Rockies advances were capped at about 20 cents.
Cooling load is relatively light in the East as temperatures are generally moderate, although highs in the low 90s in parts of the South make sure that air conditioners are running. It is the West where high heat levels are expanding (Denver is expected to repeat Wednesday's high around 95 on Thursday). Date-specific record highs are anticipated over the Intermountain West and Southwest from Thursday through Saturday, according to The Weather Channel.
Florida Gas Zones 2 and 3 fell about a dime and 15 cents respectively after Florida Gas Transmission allowed an Overage Alert Day that had been in effect for the previous two days to elapse Wednesday.
PG&E is ending a two-day high-inventory OFO Thursday, but Malin and the PG&E citygate were down another 6-8 cents.
"All of our Gulf Coast points are down a few cents," said a trader who sells gas for several independent producers, but despite that market demand still seemed to be robust. She didn't see any chance of cash gas rallying Thursday with cooling remaining moderate, natural gas futures continuing to fall (down another 12.8 cents Wednesday) and crude oil futures taking it on the chin Wednesday following several days of advances. However, she perceived some points in Texas as being comparatively strong, which she attributed to "anticipation of extra [power] generation load" (Houston's forecast has highs of 94 running through the weekend).
All of her clients' gas is flowing again now that a TGT maintenance project in North Louisiana (see Daily GPI, June 12) has ended, the trader went on. So far a new TGT project constraining the Sharon-Carthage Line from East Texas into northwest Louisiana (see Daily GPI, June 18) has not had any impact on their production, she said.
She had wanted to get some July business going this week, but said a producer had told her "not until Monday" because his forecasts indicated some significant increases in heat levels next week.
Rising cooling load was the main reason Rockies prices were quite a bit stronger again, said a western source, but nuke outages also played a part. The Western Electricity Coordinating Council is indicating that 26% of nuclear power capacity in its territory is down currently, so gas must be making up for some of that generation shortfall, he said.
A utility buyer in the Lower Northwest said that even though local temperatures are edging up near 90 degrees, her company hasn't had a comparatively strong increase in power demand, so it is staying out of the spot gas market for now.
The National Weather Service (NWS) predicts above-normal temperatures for almost the entire U.S. during the June 25-29 workweek. In its six-to-10-day forecast posted Tuesday, the agency said it looks for above-normal conditions everywhere except these areas: all of Texas along with most of New Mexico and the southwestern half of Oklahoma (including the Panhandle; a strip along the Gulf Coast from Louisiana through Florida and including southern Georgia; and all of the Northeast except for Pennsylvania, far western New York and the northern edge of New Jersey. The only areas where NWS expects below-normal temperatures is South and West Texas along with the southeastern corner of New Mexico; the southern half of the Florida peninsula; and northern Maine.
The latest blast of heat coming to a close, and there is "pleasant warmth" ahead until the next heat wave arrives next week, Weather 2000 said in a Tuesday advisory. But with June nearly two-thirds over, the Chicago-to-New York quadrant of the nation is easily on pace for its top 10 hottest Junes of all time, the New York City-based consulting firm added.
"Obviously June 2007 is sultry and setting June records, but some people are waiting for the contiguous U.S. to turn into the planet Venus before they get excited about summer warmth," Weather 2000 continued, so it noted a couple of appropriate early-summer paradigms: 1) "Summer is not winter." By this it meant dominant winter regimes can be a lot more persistent than summer regimes. "While 20, 25 or even 30 consecutive below-normal days in the heart of winter are witnessed, a frontal passage here, a foggy day there, a downpour here, a sea breeze there, all make 'interruptions' to the overall monthly and seasonal regime quite common in the Summer. Hence, even the hottest summers in recorded history have numerous cool days and cool weeks thrown in, so don't miss the forest for the trees..." 2) You don't need heat to be hot. "Another difference between summer and winter is that small anomalies can go a long way. Monthly summer standard deviations for most U.S. locations are around [a third] of the monthly winter standard deviations. For example, in June 2005 (which happens to also be a good, recent analog to this year) New York City 'only' had four days [above 90 degrees] and ended up 'only' [2.8 degrees] above normal for the month (including 10 below-normal days), but that was good enough to be 1.5 sigma above the mean and the 'hottest' June in NYC since 1994!"
Bentek Energy said it expects an 89 Bcf storage injection to be reported for the week ending June 15. Reuters news service said its survey of 22 industry players also found an average expectation of an 89 Bcf build. The estimates ranged from 80 Bcf to 104 Bcf, Reuters said.
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