A strong market rally was kept going Tuesday by pretty much the same influences that had spurred gains the day before: hotter weather trends in several areas; a major nuclear outage in the West, where the heat was greatest in the region’s southerly climes; and a streak of rising natural gas futures prices, which was into its third day despite softer oil product numbers at Nymex.

Tuesday’s gains tended to be spread more evenly across geographic regions than the day before. The overall range of increases was from the general vicinity of 15 cents to nearly half a dollar; most fit within a spread of 15-30 cents.

Although most of the South had high temperatures in the high 80s and occasionally in the low 90s, its power generation load was being tempered a bit by a tropical disturbance that had moved ashore into Louisiana overnight Monday and was drenching much of the Gulf Coast from East Texas through the Florida Panhandle.

As the Atlantic basin begins to show muted signs of activity early in the hurricane season, a tropical wave about 500 miles east of the Windward Islands headed westward. However, the upper-level environment is unfavorable for further development, according to The Weather Channel.

A Lower Midwest utility buyer commented that “there’s nothing to sweat over” amid moderate to warm temperatures in his region, so he’s been making only small purchases lately. He was at a loss to predict how much longer cash numbers would keep going up this week, noting that his area was supposed to get a little cooler, so obviously the Lower Midwest market will be a little weak. But the gas screen was still on the rise Tuesday, and there seemed to be plenty of weather load elsewhere, so making a call on Wednesday’s price direction was a toss-up, the buyer said.

But a Calgary-based producer didn’t think prices would stay firm too much longer, at least in the West. “Other than this newly arrived power load from the heat and Palo Verde [nuclear plant] going down, I don’t see much else supporting regional prices,” he said. And when the nukes come back online, a lot of air conditioning load for gas will fade, the producer said.

Arizona Public Service, operator of the Palo Verde’s three reactors with their 3,900 MW of output capacity, isn’t saying at this point when they expect the facility to come back online after going down early Monday after a regional “grid disturbance,” the producer said. They want to be sure before making a ramp-up announcement, he continued. But a power trader said indications were that Palo Verde was likely to be at or returning to 100% operation by Friday (see story in Power Market Today).

Besides Westcoast and El Paso, Northern Border also is running a little low on linepack due to power generation load, the producer said. However, Kern River was still reporting high linepack Tuesday in all four segments.

The possibility of up to an extra 1.2 Bcf or so being thrown into the Rockies/Pacific Northwest market during the current week due to Northwest Pipeline saying it might need to have interruptible accounts emptied at its Jackson Prairie Storage facility (see Daily GPI, June 14) has been averted, at least for the time being. A Northwest spokesman said that when Jackson Prairie volumes were evaluated at the end of Sunday’s gas day, available injection capacity was still a little below a key 3 Bcf threshold. However, customers had been in a gradual withdrawal mode, so it was decided not to order vacation of the interruptible storage, he said. There are only a handful of such customers, so each was notified individually about the decision rather than in an all-shipper letter, the spokesman said. Northwest will continue to monitor Jackson Prairie activity, and it’s still possible that interruptible storage might have to make way for firm services.

Florida Gas Transmission production-area pools saw some of the largest Gulf Coast increases as the pipeline kept an OFO-like restriction in place and tightened the imbalance tolerance (see Transportation Notes).

Citigroup analyst Kyle Cooper estimates that the Energy Information Administration will report a storage injection between 84 and 94 Bcf for the week ended June 11. Meanwhile, Thomas Driscoll of Lehman Brothers looks for an injection of 95 Bcf. The prediction compared with a year-ago injection of 114 Bcf. Driscoll said that if his estimate is correct, “the storage surplus versus a year ago would decrease from 342 Bcf to 323 Bcf and the storage variance versus five-year averages would shift from a 3 Bcf deficit to a 10 Bcf surplus.”

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