The cash market showed it had not yet run out of steam, despite a futures rally faltering slightly a day earlier, as it logged increases across the board Wednesday in its third straight day of overwhelming firmness. Outside the well established major heat areas of the south-central and southwestern U.S., cooling load was no stronger than normal at best in the South and about to start receding to some extent in the Northeast following an extended above-normal period.
Nevertheless, power generation load aggregated from various regions proved to be sufficient to sustain this week’s rally for at least one more day.
Gains ranged from a couple of pennies to about a quarter and tended to be strongest in the Rockies.
Physical traders will have a smidgen of positive prior-day screen guidance Thursday after the September futures contract rebounded by a 4.1 cents Wednesday (see related story).
The mid-morning announcement of a throughput reduction of 240-250 MMcf/d on the High Island Offshore System after Enterprise Products Partners experienced an explosion and compressor fire at its High Island 264 platform (see related story) came too late to affect most cash trading. It was expected to have little impact anyway as there were plentiful supplies and storage inventories in the Gulf Coast eager to fill the shortfall gap.
A cold front lingering along the coast southwestward into the Mid-Atlantic will start liberating the Northeast by five to eight degrees from the unusually high temperatures that have dominated regional weather for the last couple of weeks or so, according to The Weather Channel. It will remain largely status quo in the Midwest, where relatively moderate highs from around 80 to the mid 80s were due to see little change Thursday.
More of the South east of Oklahoma-Texas (where highs of around 100 or slightly less will remain the norm) is starting to peak in the low to mid 90s than before. That meant little more than average summertime conditions have returned, however. Florida Gas Transmission tightened the tolerance on an Overage Alert Day (see Transportation Notes). The Florida citygate responded with the day’s biggest uptick.
The Rockies continue to supplement the desert Southwest’s usual major air conditioning demand a bit with highs forecast for the upper 80s or around 90 Thursday. However, that was about it for weather-based load in the West as inland California, the Pacific Northwest and Western Canada as temperatures were predicted for no more than the mid 70s Thursday, and the Calgary area is getting fairly chilly with readings peaking in the mid 60s Thursday.
A Midwestern marketer said her MichCon delivered price for Thursday was up a little more than a dime, adding that a supplier had told her MichCon and Consumers Energy prices “were running neck and neck.” The Midwest is still mild for the most part now, she said, but should start feeling addition heat toward the weekend.
SunTrust Robinson Humphrey analyst Cameron Horwitz looks for a storage addition of 63 Bcf to be reported for the week ending July 31. Stephen Smith of Stephen Smith Energy Associates weighed in with an estimate of 61 Bcf, which he said was down from a previous volume of 63 Bcf.
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