Sparked by Friday’s 17.4-cent gain in July natural gas futures, the oppressive heat wave in a number of U.S. regions and fierce storms in the Midwest and the Plains that are headed for the Northeast and Mid-Atlantic, most cash points moved higher on Monday with some Rockies locations — which lost more than a dollar on Friday — gaining the same amount back.
Mercury readings in the mid-to-high 90s with some places topping the 100 degree mark extended from New England down through the Mid-Atlantic states into South Carolina. The heat, which began in earnest over the weekend, likely brought air conditioners for a majority of the country into full service mode for the first time this summer. Schools in Philadelphia and Connecticut closed early Monday and New York City opened 300 cooling centers for weary pedestrians. In the East the Algonquin Citygate gained 33 cents Monday to average $14.69, while Transco Zone 6 NY added 64 cents to average $14.88.
The Midcontinent saw gains ranging mostly from 30 to 75 cents as the region suffered the one-two punch of severe summer storms topped with sizzling heat.
“For all intents and purposes, oil is approaching $150/bbl, gas is north of $10 and there are heat waves and storms everywhere. Welcome to the new world, I guess,” said a Midcontinent trader. “Monday’s are a nonevent in a lot of instances in the sense that there is a lot of speculation to open the week and prices don’t know which way to go. Everything stayed pretty strong on the day. We are looking at some pretty hot temperatures, so there is demand on the pipes and that is keeping the price up. Gas is still pretty strong except for Panhandle Eastern, which came down because there is a lot of Rockies Express gas coming to this side of the country.”
The cash market will not have the same support Tuesday, at least from futures. July natural gas dropped 8.9 cents Monday to close at $12.604. Crude futures also took a break as the July crude contract spilled $4.19 from Friday’s close to finish at $134.35/bbl.
“The cash market is certainly feeding off of the strong showing in futures recently,” the trader said. “What we have here is a real case of the tail wagging the dog.”
AccuWeather.com meteorologists said they expect the heat wave in the East to continue for another day. “With a high pressure system anchored off the southeastern United States coast, and the jet steam well to the north, the eastern United States has experienced sweltering conditions, with many locations approaching record highs,” said Mark Paquette, a meteorologist with AccuWeather.com. “With the high temperatures also comes the excessive humidity so common across the eastern United States in summer. The Northeast and Ohio Valley will get a reprieve from this first heat wave of the year as a cold front approaches on Tuesday and eventually clears the coast on Tuesday night.”
On the storm front, AccuWeather.com meteorologist Meghan Evans noted that the system that has been plaguing the Plains to the Midwest with severe storms will shift toward the East on Tuesday. “Storms will be triggered along and ahead of the front across the Ohio Valley to the Northeast,” she said. “Some of the storms will become strong or severe, especially with the hot and humid air that has been setting up over the region. The greatest threats with the storms will be heavy downpours and localized flooding, hail and damaging winds. The strongest storms could also spawn a tornado. Behind the cold front, some relief from the heat will be in store for the Northeast.”
She noted that the I-95 corridor will remain dry, but hot and humid and that cooler air will blanket the Great Lakes to northern Plains behind the storm. “The Northwest will be quite cool with rain in spots,” she said. “Some storms will fire over central Wyoming and South Dakota through northern Minnesota by late in the day [Tuesday]. The Southwest will remain dry with sunshine and hot weather over the interior.”
Responding to moderate temps late last week, most Rockies points recorded dollar-plus plunges (see Daily GPI, June 9). On Monday, that move was reversed as a number of the major points recorded dollar-plus gains. Cheyenne posted a $1.21 gain to average $8.19 and CIG Mainline added $1.14 to average $8.06.
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