Overall weather fundamentals didn't seem all that supportive, but prices increased at a large majority of points Monday. The return of industrial load following the weekend was a minor bullish factor, while Friday's futures gain of 0.3 cent was essentially neutral to the cash market.
A few flat to about C10 cents lower locations were exceptions to the general firmness. Otherwise, gains ranged from 2-3 cents to nearly 35 cents.
The Florida citygate topped all other increases as Florida Gas Transmission kept an Overage Alert Day that started last Thursday in effect through Monday (see Transportation Notes). The Southwest producing basins tended to have most of the next-largest upticks.
Nymex will again provide only marginal guidance for cash traders Tuesday after the prompt-month gas futures contract fell 1.4 cents after wavering on either side of flat during the day (see related story).
For the first time in three weeks market activity began with no looming threats to offshore production.
Despite PG&E implementing a new high-inventory OFO Tuesday (see Transportation Notes), the PG&E citygate and Malin realized increases just shy of 15 cents.
After dipping slightly below Kern River's minimum target levels over the weekend, linepack had "returned to the low end of normal" Monday, the pipeline said.
The southern U.S. will see highs Tuesday from the low to mid 90s in the Southeast and extending as far north as Oklahoma and the Denver area, while the Southwest's Phoenix area will continue to reach the 110 area. That was the only really bullish part of the forecast, though, as lower Northeast peak temperatures will be retreating several degrees, the Midwest will remain fairly moderate, and cool to mild conditions will reign along the West Coast and in Canada.
"Coming out of a weekend" seemed a weak but somewhat plausible explanation for Monday's gains, a Texas-based marketer said. Certainly there's not a lot of heat on the horizon for this week, he added. The marketer expects Tuesday numbers to be closer to flat but "not much different" from Monday. It's shaping up to be a very quiet market for a while, he said.
A Midwest marketer agreed on current market activity being "pretty dull." It's not very hot in her area with peak thermometer levels limited to the mid 80s, but it should be getting more humid later this week, she said. Her company shunned buying any spot gas for Tuesday, both because of the higher prices and low demand resulting in no pressing purchase needs, she said.
A Rockies producer noted that it is very hot in the Denver area with a high of 95 predicted for Tuesday, and slightly cooler but still on the warm side in other sections of his region. CIG basis to Henry Hub has been holding remarkably steady at minus 75 cents for several weeks now, he said.
Four new rigs joined the U.S. search for natural gas during the week ending July 9, raising the total to 964, according to the Baker Hughes Rotary Rig Count. All of the additions occurred onshore, as the Gulf of Mexico tally was unchanged at nine. The latest count was up 1% from a month ago and 43% higher than year-earlier levels, Baker Hughes said.
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