Forecasts of more seasonal (that is, hotter) weather across the southern half of the United States, the previous Friday’s advance of 22.9 cents by July futures and the return of industrial load from its typical weekend reduction were responsible for strong cash market gains across the board Monday. Many hit triple digits and a few exceeded $2. Some buyers might want to argue that a bit of “storm hype” also was involved.
Upticks ranged from a little more than a quarter to the $2.20 area on the official second day of hurricane season. As was the case on the preceding Friday, points in the Midcontinent and West tended to turn in the strongest performances.
Daily highs on either side of 90 degrees have become entrenched in most of the South by now and are expected to reach the 100s from West Texas to the desert Southwest. Hot conditions are occupying the Midcontinent also, with Oklahoma City predicted to peak just shy of 100 for the second straight day Tuesday.
The northern half of the U.S. and lower Canada won’t be contributing much cooling load for a while longer, as temperatures will continue to range from mild to chilly in those areas. AccuWeather.com said cool marine air flowing into the Northeast will delay a significant warm-up in that region until around Thursday or Friday.
An upper-level trough moving into the Pacific Northwest Tuesday will keep that area on the chilly side and, as it spreads farther later in the week, will cool off temperatures running as high as the low 80s in the lower Rockies, The Weather Channel said.
Formation and dissipation of the first tropical storm of the 2008 Atlantic hurricane season came and went over the course of the weekend with absolutely no threat to Gulf of Mexico oil and gas interests. There was storm buzz in the industry Monday, nevertheless, as many traders undoubtedly recall that the 2007 season also was active from the get-go (see Daily GPI, June 4, 2007).
Tropical Storm Arthur developed Saturday in the western Caribbean Sea and wasted little time in moving ashore over Mexico’s Yucatan Peninsula, where it was downgraded to a tropical depression Sunday. As of early Monday afternoon the remnants of Arthur were still producing heavy rains over portions of Belize, Guatemala and southeastern Mexico, the National Hurricane Center said. The agency did not expect any further tropical cyclone formation during the succeeding 48 hours.
The Weather 2000 consulting firm noted that the National Hurricane Center “took the unconventional step of classifying a storm while over land probably due to the sensitivity of the region after [Hurricane] Dean’s Category 5 landfall last year.”
Trading at Dracut was highly limited as a Maritimes & Northeast U.S. segment outage is restricting flows through Baileyville Compressor Station to zero through Tuesday (see Daily GPI, May 30).
The intrastate Oklahoma market was very strong Monday from high temperatures there expected to continue nearing 100 degrees, a Midcontinent producer said. However, quotes were tapering off slightly near the end of trading, he added.
He said he expects substantial cooling load to continue in the Midcontinent through Wednesday, and then a rainstorm is predicted to cool off area conditions around Thursday.
The producer reported hearing some mentions of “storm hype” Monday, but said if a person wasn’t paying much attention to the news over the weekend, it was easy to miss any mention of Arthur. It didn’t even come close to U.S. Gulf of Mexico facilities and faded quickly, he noted.
A marketer in the Upper Midwest said local temperatures had been quite warm Sunday and Monday, but would be getting nippy again Tuesday. She said she didn’t hear any “storm hype” talk, probably because her company wasn’t buying spot gas anyway Monday, but she thought it was involved to some degree in the large price spikes. The company may need to get back into the market again Tuesday, she said, but prices could get even “uglier” following a second straight day of a large futures increase, with the June natural gas contract adding 26.6 cents to its value Monday.
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