The previous day's decline of 22.2 cents by September futures obviously was more compelling to the cash market than forecasts of very hot weather continuing in the eastern half of the U.S. The result was falling prices at most points Tuesday.
A few flat to about a nickel higher locations were exceptions to the overall softness. The Florida citygate's spike of about $2 was an aberration again as Florida Gas Transmission neared a full month of having an Overage Alert Day in effect.
Otherwise, losses ranged from a little less than a nickel to about 20 cents, with the California and Rockies markets taking most of the largest hits.
Cash numbers again will have negative screen guidance Wednesday after prompt-month futures fell another 6.2 cents Tuesday (see related story).
Hot weather in the South, with Wednesday's predicted highs ranging from the mid 90s to mid 100s from the South Atlantic states through the Midcontinent into the desert Southwest, had essentially no effect in sustaining gas prices. Most of Canada and the northern half of the U.S. could not expect to get above the 70s or 80s.
A high-inventory OFO by PG&E (see Transportation Notes) pushed PG&E citygate and Malin numbers about 15 cents lower.
The formation of Tropical Storm Colin was not expected to be meaningful to the gas market as the National Hurricane Center projected that Colin would veer to the north and not enter the Gulf of Mexico. A system in the central Caribbean Sea was given a 20% chance of developing into a tropical cyclone in the next couple of days.
Southern said it had filled 44 Bcf, or 73% of its total 60 Bcf of working storage gas capacity, as of last Thursday (July 29). That was way behind last year's pace of 55.9 Bcf (93%) being injected on July 30, 2009, but slightly ahead of the July 31, 2008 total of 42.7 Bcf (71%).
A marketer in the Upper Midwest said local temperatures were rising, but none of her company's clients were asking for extra gas. To her, that indicated that the clients' baseload supplies appeared to be adequate for their needs. However, she said it "seems like a hotter summer than most" so far, and local forecasters were saying that more of the same could be expected through September and October.
The National Weather Service (NWS) predicts above-normal temperatures during the Aug. 9-13 workweek from most of Nevada and Arizona eastward into the eastern half through the western end of the Northeast, most of the Mid-Atlantic and the northern end of the South Atlantic state. However, much of the Gulf Coast is expected to see normal conditions, with below-normal temperatures predicted for most of the coast from South Texas through southern Georgia and all of Florida. NWS also looks for below-normal readings along coastal California expanding into most of Oregon and nearly all of Washington state.
Stephen Smith of Stephen Smith Energy Associates said he is projecting a storage build of 29 Bcf for the week ending July 30.
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