The cash market threw some traders a curve Tuesday. Instead of following the example of Monday’s screen plunge as had been expected, flat to barely lower numbers dominated at most points. Most declines were 3 cents or less, and only a few points fell by more than a nickel. The only significant upticks of more than a dime came in the Rockies with Kern River-Opal, Northwest Domestic, Cheyenne Hub and CIG all showing gains of 10 to 20 cents.

“I could have sworn that between the big Nymex dive the day before and the arrival of very mild weather in most of the Northeast and Midwest, we would see more serious cash softness today [Tuesday],” one source remarked. He noted that natural gas futures only provided mild support by rising a little less than 4 cents, although crude oil and heating oil futures realized strong gains.

“It’s gorgeous weather here today, just what the forecasters promised,” said a Northeast utility buyer. Sure enough, a nine-day siege of very hot weather had ended for the region, replaced by high temperatures in the 70s. However, the buyer was a bit puzzled about why such a significant reduction in air conditioning load did not translate into larger gas price dips.

A utility buyer in the Midwest also reported “fine weather” in her area, but added temperatures were still approaching 100 degrees west of her in the Upper Plains. Prices were flat at first Tuesday and still maintaining a premium to the screen, she said, but then they began falling and for a little while were at a discount to the screen. The buyer reported hearing “anywhere from 20 to 45 Bcf” forecast for EIA’s Thursday morning storage injection report. Because the report will encompass a second straight week of above average heat, which theoretically should substantially limit injections, she anticipates big sell-offs in cash and futures if the report tops 50 Bcf.

“Chicago isn’t the hot potato it was recently, but they still need gas,” commented a Midcontinent producer.

A Calgary-based producer said area temperatures had dropped to freezing over the weekend but were back up to about 18 degrees Celsius (mid 60s Fahrenheit) Tuesday afternoon. He said he had largely missed out on early Chicago citygates in the mid $2.70s, but averaged sales in the low $2.70s before gate quotes softened into the high $2.60s. The Midwest should be feeling hotter weather again toward the weekend, he added.

PG&E-related points saw some of the day’s bigger losses approaching a dime, due to a high-linepack OFO with zero imbalance tolerance declared by the utility (see Transportation Notes).

Tropical Storm Bertha had been downgraded to a tropical depression and was drifting slowly to the south-southwest over central Louisiana Tuesday afternoon, according to the National Weather Service. It continued to dump heavy rain east of the center on parts of eastern Louisiana and southwest Mississippi. Meanwhile, Tropical Depression Three was barely moving about 280 miles southeast of Charleston, SC as of 5 p.m. EDT. It was considered capable of becoming Tropical Storm Cristobal sometime late Tuesday.

“Wait until the fourth named storm comes along,” quipped one market observer. “I can just see all the headlines with variations on ‘Hello, Dolly’ now.”

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