As a heat wave continued to grip most of the eastern third of the United States, cash market points were a little less unanimous on Tuesday in terms of price direction than they were on Monday, when they were almost universally higher. Taking their cue from Monday’s 8.9-cent drop in near-month natural gas futures, most eastern points and Gulf Coast points saw drops, while the Midcontinent and western locations saw continued strength.

Most major northeastern points saw drops of 60 cents to just under a dollar. Iroquois Zone 2 dropped just a few cents shy of a dollar to average over $13.80. Down on the Gulf Coast, the Henry Hub basically held its ground. Midcontinent points mostly gained between 20-40 cents, although the Chicago citygate was unchanged.

Out West, Rockies points were mixed while the PG&E citygate and the Southern California border average gained almost 20 cents and 50 cents, respectively.

“Everything is up,” said a western trader. “Basically what we have been seeing over the last week or so was some constraints at AECO due to the Cochrane stripping plant. That caused a lot of havoc late last week, but things have come around basically full circle and they are back to full strength, so we might see some price dips off of that.”

He noted that while the West is not seeing the above-average temps that the East Coast has, it is supposed to be warm in California. “Temps are up a little bit from last weekend, but they are not going to be that high. We should see mild cooling load, but not a huge spike.”

Looking toward the near future, the trader said he believes prices could still head higher. “I’m looking at forward prices near $13, so I think we will have a slow march higher. There is probably a little more room before we taper off. I can’t see prices going much higher, but then again who knows? I would have never envisioned it going to $12 either. With crude almost touching $140 late last week, anything seems possible.”

The market should get a little help on Wednesday from a weak screen performance Tuesday. July natural gas futures declined for the second consecutive session, but this time was a little more convincing. The contract dropped 16.9 cents to close at $12.435. July crude also closed lower for a second straight session by dropping $3.04 to $131.31/bbl.

The East should be getting a reprieve from the heat — at least in the short term, according to forecasters. “Much-needed relief is on the way…in the form of a cold front that is now moving through the Ohio and Tennessee valleys,” said Eric Wanenchak, a meteorologist with AccuWeather.com. “This front will cross the Eastern Seaboard Tuesday night into Wednesday morning, bringing showers and thunderstorms.”

He noted that highs Wednesday will only reach the upper 70s and low 80s across the interior of the Northeast, and middle to upper 80s along the I-95 corridor from New York to Richmond. “Although the temperatures will remain a few degrees above normal in the big cities, it will certainly feel cooler when compared to the widespread middle to upper 90s felt over the past few days,” he said. “In addition to the cooler temperatures, the humidity will drop to a more comfortable level throughout the region.”

However, the forecasting firm warned that the break in humidity would be short lived, noting that humid air will return to the Mid-Atlantic region by the end of the week, while thunderstorms “remain common” from the Gulf Coast to the lower Great Lakes. AccuWeather.com added that much of the West will likely be dry during the period.

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