It mystified traders, but prices were flat to about half a dollar higher across the board Tuesday despite cooling load being light outside the southern U.S. and the previous day’s 12.8-cent decline by August futures.
Most of the biggest increases occurred in the Rocky Mountains, where temperatures were expected to continue reaching the mid 90s in Denver, and the Midcontinent, where highs were due to return to the mid 90s in Oklahoma City.
Negative screen guidance for the cash market will continue Wednesday after Nymex’s August natural gas contract dropped another 5.8 cents (see related story).
Florida Gas Transmission continued to warn of a potential Overage Alert Day due to warm weather in its Florida market area. After ignoring a previous warning by falling Monday, Florida Gas Zones 2 and 3 were up about a dime each Tuesday.
Highs will remain in the mid 90s to low 100s in Texas and the mid to high 100s in such desert Southwest locations as Phoenix Wednesday, but otherwise very hot weather will remain in short supply. Some areas in the mid-South will reach the mid 90s, but conditions will stay mild in most areas, according to Weather Central.
A Gulf Coast producer said he had “no clue” about Tuesday’s price increases. He also used the expressions of “doesn’t make sense” and “baffled” in trying to describe a firmer market that didn’t fit with the mostly bearish influences.
The producer said his usual customers “bought a little [gas] but not that much.” He predicted that prices will be lower Wednesday mainly because such unlikely price increases as Tuesday’s can’t be sustained.
“This is ridiculous,” an Upper Midwest marketer said of having to wear a coat at lunchtime Tuesday while gas prices were rising. “You’d think that the storage news and weather would keep” prices from going up, she said. Her company has seen the market defy common sense before, but this seems to be a little more extreme, she said.
The marketer said her area is cool now but should be getting up into the 80s by the weekend. Even that won’t be terribly warm, she noted. “Where is that gas demand coming from?”
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