Rising temperatures, particularly in the Midwest and Midcontinent regions, gave an extra push Tuesday to the somewhat hesitant rally of the day before. The result was double-digit gains at almost every point Tuesday, with a majority of them surpassing 20 cents and a couple approaching 40 cents.

A waffling screen provided no guidance to cash traders, meandering slightly to either side of flat before finally closing the day up 0.6 cents. Crude oil futures fell slightly but managed to stay on the plus side of $31/bbl.

“Yes, it’s finally getting warm here,” said a Midwest marketer. The region isn’t exactly soaring into the summer season yet but at least is getting a little toasty after an unusually cool spring, he said. Afternoon highs were reaching 80 or above at many locations throughout the Upper Plains and Midwest. Even the northern reaches of the Deep South, which have been conspicuously absent previously from sharing in the region’s typical muggy heat in late spring, were starting to get into the act Tuesday with highs in the mid 80s.

It’s amazing how little air conditioning load much of the South has been seeing this close to summer, commented a Florida utility buyer. “Of course, near-constant rains recently have kept the temperatures down.” He saw it as indicative of how light Florida load is that he was selling first-of-month baseload Tuesday. “It’s nice to be able to buy gas at lower prices, but it hurts to come to the end of the month and see how little activity we’ve had,” the buyer added. Florida utilities need more throughput to maintain their margins, he added.

The Northeast is still a holdout against normal summer heat, which some residents reportedly would welcome in lieu of continued nighttime chills. An LDC in the region had no trading to report, saying it was getting by on first-of-month baseload. “It was sort of hot Sunday, but we’re back down to the 70s since then,” the gas buyer said. However, she predicted that if another big volume comes up in the storage report Thursday, “we probably will be out shopping for storage bargains afterward.”

“Cash opened strongly about a dime higher everywhere and kept rising, but then had trouble finding buyers near end,” a Canadian producer said. “Everyone is staring at that EIA [storage injection] number from last week. Was it real, meaning we’ve destroyed a lot of other [non-storage] demand?” He went on to say that demand destruction may be a reality in other areas, “but not one industrial customer of mine has shut down [due to high gas prices], although they’ve been whining a lot.”

Referring to predictions by at least one analyst of EIA reporting a 130 Bcf injection Thursday morning, the producer said he wasn’t sure if the industry is physically capable of putting away that much gas in one week.

Rockies gas had an unknown amount of supply shortfall due to reported problems with Jonah Field production (see Transportation Notes).

The National Weather Service has a slightly more bullish outlook for the June 23-27 period than it presented in recent weeks. Perhaps most important, NWS sees above normal temperatures next week in the Northeast and Midwest, with similar conditions predicted for the extreme southeastern corner of the U.S. and for much of the desert Southwest. Below normal readings are expected in California, the Pacific Northwest/Upper Plains and a chunk of the Gulf Coast extending from East Texas through Louisiana and Arkansas into Mississippi. Normal weather is due in all other areas, NWS said.

Although the Atlantic Basin remained free of any significant storm activity, forecasters were keeping an eye on two Caribbean tropical disturbances Tuesday. Development was not possible for one due to its overland location over Mexico’s Yucatan Peninsula, according to The Weather Channel. The other disturbance was bringing rain to Jamaica, Cuba and parts of the Bahamas but also was not expected to develop because of strong upper-level winds in the region, TWC said.

©Copyright 2003 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.