Most points stayed close to flat Tuesday in a cash market that seemed to have trouble deciding how to respond to varying weather and futures influences.
Only a couple of points outside the Rockies saw price changes exceeding single digits. Flat to up or down movements of as much as about a nickel were dominant, with gains and losses approximately evenly divided. Rockies increases ran as high as about 20 cents.
Nymex had scant prior-trading-support for cash traders Tuesday with a 2-cent gain in August futures Monday, and it got slightly stingier Tuesday as the prompt-month contract managed to rise only another 1.6 cents (see related story).
Other than a brief warm-up into the 90s in the Pacific Northwest due to recede into the 80s Wednesday, there were only minor variations in the overall weather forecast, although Western Canada was making up somewhat for the Pacific Northwest cooldown with Calgary expected to reach a peak of 93. Highs in the 90s and 100s were due to persist from the western end of the South through the desert Southwest into interior California.
Otherwise midsummer heat levels remain subpar. Most areas, including a substantial section of the South, are failing to get above the low to mid 80s at this point.
PG&E is ending a low-inventory OFO Wednesday, which led to small declines of less than a nickel at Malin and the PG&E citygate.
Northern Natural Gas reflected the current dearth of cooling load in the Midwest. A bulletin board posting reporting a normal system-weighted temperature of 73 degrees at this time of year projected averages of 67 Tuesday, 70 Wednesday and 71 on both Thursday and Friday.
There still were no plausible threats to Gulf of Mexico (GOM) production, but Atlantic basin tropical activity is heating up a bit. The National Hurricane Center (NHC) said a tropical wave in the eastern Caribbean Sea was producing locally heavy rainfall and gusty winds Tuesday afternoon in parts of the Virgin Islands, Puerto Rico, Dominican Republic and Haiti, but “upper-level winds remain unfavorable for development of this system at this time.” Closer to the GOM, showers and thunderstorms continued near the northern Bahamas in association with a weak surface trough, NHC said, but surface pressures in the area remained high and there were no signs of development.
A Midwestern utility buyer said it was “pretty cool” in his area, with only a 70s high Tuesday. Conditions will be warming into the low 80s by Friday, he said, but then the forecast goes back into the 70s for the weekend. Summer temperatures have been unusually cool for the most part so far across the Midwest and Northeast, he noted.
The buyer said his company can expect an appreciable amount of crop drying load during the August-October period, but currently has little irrigation-related demand.
It’s still early, he said, but it’s looking like slightly weaker index premiums are in store for August first-of-month indexes because of the weak economy. “Index flat seems to be popular,” he added.
A marketer in the Upper Midwest said his company has bought almost no spot gas lately, but instead is trying to move gas around among accounts to manage supplies for clients. It’s “the worst midsummer demand in the Midwest I’ve ever seen,” he said.
The National Weather Service (NWS) predicts below-normal temperatures in much of the central U.S. during the July 27-31 workweek. In its six- to 10-day forecast posted Tuesday afternoon, NWS said it expects below-normal readings from central Montana through the eastern end of Ohio to extend southward into virtually all of Oklahoma along with the northern end of Louisiana, the northern two-thirds of Mississippi and Alabama and northwestern Georgia. Above-normal temperatures are forecast for the West everywhere west of a line running southward from western Montana into central Utah and then curving southeastward into West and South Texas.
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