The breaking of a five-day losing streak by August futures Monday did essentially nothing to boost the cash market Tuesday. Four flat to about a dime higher points were the sole exceptions to overall softness. Quotes fell at most points despite forecasts of peak temperatures in the upper 80s or higher in much of the U.S. Wednesday.

Losses ranged from a couple of pennies to a little more than 60 cents and were largest in the Midcontinent and Rockies. Both regions were expected to see highs in the mid to upper 90s Wednesday, but apparently that didn’t create enough cooling load to keep a floor under cash prices.

The screen again provided a modicum of positive guidance for the next-day cash market, with Nymex’s August natural gas contract going off the board 5.4 cents higher even as the petroleum futures complex plunged (see related story).

A four-day outage of the Gulf of Mexico’s Independence Hub platform, previously scheduled for last week but postponed due to Hurricane Dolly-related heavy seas, is tentatively set for this week but was unlikely to begin Tuesday, said Rick Rainey, spokesman for the hub’s majority owner, Enterprise Products Partners. The company must make sure that all work boats, crews and associated equipment are on-site before beginning evaluation of the repairs made to a leak in the Independence Trail export pipeline, he said (see Daily GPI, June 17). Recent hub production has been in the 800-850 MMcf/d range, Rainey said.

The South will experience a slight cooling trend Wednesday, especially in its central section where highs were in the vicinity of 100 degrees Tuesday in Arkansas, Mississippi and western Tennessee. The Northeast and Midwest will see small movement in temperatures, with highs remaining mostly in the mid to upper 80s.

It also will be pretty much status quo in the West: hot to very hot in the Rockies, desert Southwest and interior California, but mild to cool on the West Coast and in the Pacific Northwest and Western Canada.

Kern River quotes plunged about 60 cents although the pipeline was reporting low linepack in the three farthest downstream of its four segments Tuesday.

Florida Gas Transmission’s (FGT) warning of the potential for an Overage Alert Day being issued due to forecasts of 90-degree weather in Florida was able to boost the Florida citygate by about a dime, but quotes for FGT’s three production-area zones were softer.

A utility buyer in the South said peak temperatures in the 90s were continuing in his area, but the big local weather story Tuesday was the 93% humidity. It will be a little cooler later this week, then warm to the mid to high 90s again.

The buyer said he purposely didn’t put out a request for offers on August baseload gas. He is sticking with term supplies from an April-October contract, saying they ought to be able to meet current-burn and storage injection needs, although he can always dip into the daily market if necessary.

The company is lowering its injection targets, he said. It bought 50 MMcf/d for injections in June and July but will take the volume down to 33 MMcf/d in August and continue with even lower levels in September and October. It turned out to be cheaper to front-load the majority of storage buying in the early part of injection season, he said.

The National Weather Service (NWS) expects above-normal temperatures during the Aug. 4-8 workweek from coast to coast. More specifically, the agency predicted such conditions in an area that includes most of California (except the northwest corner), extends northeastward into Montana and eastward into the Texas-Louisiana Gulf Coast area (excluding southern Arizona and New Mexico along with West Texas and South Texas), then narrows into a sweep to the Mid-Atlantic/lower Northeast region that excludes the Upper Midwest and much of the Southeast. The NWS forecast calls for below-normal temperatures in three areas: the Florida peninsula; most of Washington state and western Oregon; and in all but the southern ends of Minnesota, Wisconsin and Michigan.

Citi Futures Perspective analyst Tim Evan looks for storage additions of 70 Bcf, 70 Bcf and 80 Bcf to be reported for the weeks ending July 25, Aug. 1 and Aug. 8, respectively. Stephen Smith of Stephen Smith Energy Associates is closely aligned with Evans’ view in predicting a build of 69 Bcf for the week ending July 25.

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