Hype or not, Tropical Storm Claudette was the primary driver behind further moderate advances in the cash market Wednesday. Cold fronts were causing much of the Midwest and Northeast to lose some of the air conditioning load that had kept the regions sweltering earlier in the week, but major heat continued to dominate the weather picture in the West (outside the Pacific Northwest and California coast) and South. The screen wavered on either side of flat before eking out a meager gain of 1.7 cents on the day, and thus had little new influence on cash prices, one trader said.

Wednesday’s quotes ranged from flat at a few points to about 20 cents higher. Several flat to barely higher Northeast citygates were evidence of the dwindling demand for gas by power generators in that region.

As of 5 p.m. EDT, the center of Claudette was about 250 miles southwest of Kingston, Jamaica and heading westward at nearly 24 mph, according to the National Hurricane Center. Mexico issued a tropical storm warning for the east coast of the Yucatan Peninsula. The Weather Channel said the storm had weakened a bit Wednesday morning as it passed south of Jamaica and that “strong southwest winds aloft ahead of the storm are inhibiting its further development at the moment, but some strengthening could occur [Thursday] as the storm approaches the Yucatan Peninsula and the shearing upper-level winds relent…Claudette may eventually get into the Gulf of Mexico (late Friday or early Saturday), but whether it gets in as a weak tropical storm (or even a tropical wave) after crossing the Yucatan or as a strengthening system…is the big question.”

There were a few signs that unless the storm threat to offshore production gets much stronger quickly, this week’s bull run may be leveling off. “No deals…no market,” said a marketer in the Midcontinent. “If our customers don’t need the gas, then we’re not going to be buying. A big cause of that is [industrial] plant turnaround. They shut down for a couple of weeks around the Fourth of July while people are on vacation.” The marketer went on to comment that his estimate for EIA’s storage report Thursday morning is a refill of 90 Bcf, but “I’ll be hoping for an even larger injection, though.”

And a western source quoted declines of about a dime for Stanfield, Malin and intra-Alberta as trading proceeded. However, his Kingsgate numbers also fell but rallied near the end in what he described as an “up-down-up” pattern.

Florida Gas Transmission extended an Overage Alert Day notice into a second day Wednesday, which pushed citygates up into the low $5.90s in one marketer’s quotes. The marketer also reported a couple of Gulfstream (from Destin) packages in the low $5.60s, adding that Gulfstream is getting to be more popular for Florida deliveries “now that traders are figuring out how to use it better.” Destin into Gulfstream is a little more expensive than Mobile Bay purchases, he said. “It’s more like a Transco Station 65 price.”

A Gulf Coast producer had these Claudette comments: “Now it looks like the storm is weakening. They said wind shear has exposed the center, keeping it weak. Still the winds are moving at 60 mph, but it is less likely that it will affect prices. People are going to watch it, and until it plays its hand there won’t be a lot of [price] movement. Of course, if it does turn north into the path of our offshore rigs, people will start talking about shut-ins, and once that happens prices are never the same.”

He shifted his focus to storage: “I hear a lot of talk about the EIA storage report coming out in the mid 90s [Bcf]. What I don’t hear much is how the market might react to that estimate. Personally I think there are a lot of movers and shakers that are ready to let the bulls run. So even a 95, which is a big injection, might be considered bullish. Now if the EIA reports a number in the 80s or the 70s even…watch out.”

The National Weather Service’s forecast for the coming business week (July 14-18) calls for above normal temperatures through most of the Lower 48 states in a broad swath from the Northeast through the Midwest and Midcontinent and encompassing the desert Southwest, Southern California and the Rockies north to the Canadian border. Buffered from the hot areas by strips of anticipated normal readings, two sections are expected to experience below normal temperatures: the Northwest state of Washington and the Southeast from the Carolinas through East Texas.

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