Prices were up by double-digit amounts at nearly all points Monday, getting strength from warming temperatures returning to several areas, a futures gain of 13.4 cents on the preceding Friday and news of a tropical system off the West African coast that had a good chance of becoming the Atlantic’s first named storm (Alex) of the season.
Nearly all increases exceeded a dime as they ranged from about a nickel to the 75-cent area. A continuing Overage Alert Day by Florida Gas Transmission, whose market area was continuing to reach temperatures in the mid 90s, caused Florida citygate prices to heavily exceed the overall market with a rise of about 75 cents into the mid $7.20s.
Futures will continue to provide substantial positive guidance to the physical market Tuesday after the prompt-month contract rose another 22.5 cents Monday (see related story).
Some return of hotter weather and prior-trading-day futures strength were undoubtedly responsible for higher cash prices Monday, but traders also were looking at a tropical system off the West Africa coast that several analysts thought might become the first Atlantic hurricane of the season.
The National Hurricane Center said Monday morning that “an area of low pressure located about 1,425 miles east-southeast of the Windward Island continues to show signs of organization. Environmental conditions are expected to remain conducive for development during the next day or so as the system moves west-northwest at about 145 mph. There remains a high chance, 60%, of this system becoming a tropical cyclone during the next 48 hours.”
A Midwest utility buyer said rain was keeping temperatures mild in his area as the week began, so there was little air conditioning load at that point. However, the weather was due to get warmer again by about midweek, he said.
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