Following the previous Friday’s sizeable drops, the market was definitely stronger Monday but remained a bit soft for the most part. Although warmer temperatures are forecast for Tuesday in some sections of the Midwest, stormy weather is expected to cool most of the region by midweek, and although it will remain generally hot, some parts of the South can also expect a slight dip in mercury levels.
Another bearish factor for cash quotes Monday was Friday’s 8.7-cent drop by July futures. However, that was slightly offset by the post-weekend revival of industrial load.
Most of the losses from 2-3 cents to about a dime occurred in the Gulf Coast, Midcontinent/Midwest and Rockies. The Northeast and California markets tended to be strongest in pricing that ranged from flat to up about 20 cents.
The cash market will have essentially neutral screen guidance for Tuesday after prompt-month futures fell 0.8 cent (see related story).
The Midwest and Northeast will be warm but not especially hot Tuesday with highs mostly throughout the 80s, while the South is due to remain torrid with peak temperatures nearing 100 in the eastern half but falling a few degrees in the western end. Despite some warming in the Rockies and scorching conditions in much of the desert Southwest, the West’s overall weather outlook will remain mild to cool.
SoCalGas and PG&E canceled weekend high-linepack OFOs (see Transportation Notes). That had a positive price impact in the SoCalGas case, as quotes rose about a dime and nearly a nickel at the SoCal citygate and Southern California border, respectively. However, the PG&E citygate dropped a little more than a nickel while Malin was down a penny or so.
Northern Natural Gas signaled the end of any cooling load in its Upper Midwest market area with a bulletin board notice projecting that its normal system weighted temperature of 69 at this time of year would be dropping from around normal at 68 Tuesday to 62 both Wednesday and Thursday.
Kern River reported linepack rising above its maximum target level Monday.
A Texas-based marketer said he expected moderate softness to dominate the cash market Tuesday primarily because of cooling trends, especially the one in the Midwest. He said friends visiting a mountain resort area in Colorado had reported snowfalls there as recently as Sunday. Transportation is pretty much hassle-free at this time, he added; his company is still dealing with several minor maintenance constraints on Tennessee at various places, but that’s not unusual.
It’s too early to be hearing any July bidweek quotes, the marketer continued. He anticipates a quiet market until bidweek activity begins in earnest late this week.
The number of active gas-directed drilling rigs in the U.S. fell by nine to 870 during the week ending June 17, according to the Baker Hughes Rotary Rig Count. One rig was added in the Gulf of Mexico, but 10 were idled onshore, Baker Hughes said. Its latest tally is flat from a month ago and down 9% from the year-earlier level.
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