Traders have said several times in recent weeks that the cash market looks to remain rather stagnant until something comes along to jolt it out of its torpor — something like a Gulf of Mexico hurricane, major aberration in storage injection data, or sustained heavy air conditioning load outside the Deep South and the desert Southwest.

Well, the third of those potential market-pushers is at hand, and it showed up in sizeable gains at all points Monday, including some spikes of half a dollar or more in California and the Northeast. Most points gained between 15 and 40 cents.

With summer having officially arrived Saturday, the Northeast and Midwest apparently felt like it was time to get in the seasonal swing after going through unusually cool springs. Highs in both regions only reached the mid to high 80s Monday, but are due to surpass 90 degrees later this week. The upper reaches of the South, which have been fairly mild recently in comparison with the strip along the Gulf Coast, were experiencing a similar warm-up.

While much of the Pacific Northwest and interior West is staying mild to cool for the time being, temperatures are expected to rise in inland California as the week goes on.

“There was a little bit of volatility in prices today [Monday] that hadn’t been there recently. It helps keep us awake,” joked a Northeast trader. The screen helped set the tone, going up more than 30 cents at one point before reversing to an eventual daily gain of just under 6 cents. The trader said a speculator’s big sale after the July contract hit $6.05 started the Nymex retreat and several others jumped on the bandwagon coming back down. “We’ve tested over $6 several times now and can’t see to break beyond it again,” he commented. “That’s probably a sign that the market thinks $6 gas is high enough and shouldn’t try to go higher.”

The Northeast hasn’t been a very active market lately, the trader continued, “but this week’s heat is stirring things up.” He was hearing of $80-90 electricity pricing in NEPOOL (New England), so that must mean “a lot of generation load for gas-fired peakers.”

“The Nymex ran up and came down,” said a troubled physical gas trader. “But I’m not seeing much of any demand, and prices aren’t moving the way I would expect them too. Could it be that everyone pumping it into storage is the only major factor keeping prices up? No, not likely. But just the same, we are going to be at capacity when winter rolls around. We really don’t have a choice.”

“Probably not,” a Florida utility buyer said when asked about the latest Florida Gas Transmission advisory of a “potential” Overage Alert Day notice for Tuesday. Her company didn’t need to make any purchases of new gas Monday and there were probably others in the same situation because of continuing heavy rains stifling air conditioning load in the Sunshine State, she said in explaining the rationale for not expecting an actual OAD. A Gulf Coast producer with wells on the FGT system concurred, saying he not only didn’t trade Monday “but I haven’t done any deals for four to five days now. That near-constant rain in Florida has just knocked out the demand.”

Burlington Resources’ action in taking more than 300 MMcf/d off the market last week for what could be months (see Daily GPI, June 23) is going to tighten Rockies supplies, a marketer said. The impact has yet to show up strongly but will become a bigger market factors as cooling load rises, she added.

Several traders mentioned that essentially nothing is happening yet in July bidweek business. However, a Northeast source reported basis deals at plus 60-64 for Texas Eastern M-3 and plus 42 for Dracut (Maritimes & Northeast into Tennessee).

A western trader commented, “We’ve got some preparation to do before the start of bidweek tomorrow [Tuesday]. Nice to have your ducks in a row before you jump in, you know?”

Analyst Thomas Driscoll of Lehman Brothers is forecasting a 120 Bcf injection in this week’s storage report, which compares to year-ago and five-year average volumes of 95 Bcf and 83 bcf respectively.

Atlantic tropical activity is staying sedate. “Although a few tropical waves are moving across the Atlantic, there is little convection associated with any of them. Significant shear in the Caribbean Sea will preclude any tropical development in that area,” according to The Weather Channel.

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