There was a new tropical storm in town Tuesday, but it failed to impact the gas market. Prices again were flat to slightly higher in most cases as forecasts remained hot in many areas but were easing downward in such key consuming regions as the Northeast and Midwest. The previous day’s 4.3-cent futures gain helped keep a floor under much of the market.
A majority of points were flat to a little more than a dime higher, but only one gain exceeded a little more than a nickel while most were less than a nickel. Losses ranging from 2-3 cents to about 15 cents were concentrated in the East, particularly in the cooling Northeast.
The cash market had prior-day futures support Tuesday but will have to go with moderately negative Nymex guidance after the prompt-month gas contract finished the day 3.3 cents lower (see related story).
As the National Hurricane Center had predicted, a tropical wave transformed into Tropical Storm Emily Monday evening. Late Tuesday afternoon Emily was moving to the west-northwest at nearly 12 mph but was expected to veer more toward the northwest, which would take it northward along Florida’s east coast and pose little threat to Gulf of Mexico production.
Hot weather was due to persist Wednesday across the southern third of the U.S. extending into the Mid-Atlantic, with locations such as Little Rock, AR, and Memphis, TN, destined to peak at about 105. However, temperatures were either staying or trending back towards relatively moderate in other market areas.
Westcoast reported linepack staying above desired levels but did not issue an OFO.
Missouri River flooding was receding a bit, and water levels could be back to normal as early as September or October, a Midwest utility buyer reported. But in the meantime the flooding-related outage of at least one nuclear power plant was helping boost her company’s gas sales to compensating gas-fired generators. Recent heat had kept gas demand by power generators strong anyway, she added.
An Upper Midwest marketer said her area could expect a cooling effect in the next couple of days from rainstorms. There’s not a lot of local cooling load right now, she said.
Stephen Smith of Stephen Smith Energy Associates said he was maintaining his original estimate of a 38 Bcf storage build for the week ending July 29. Credit Suisse’s Stefan Revielle is looking for a larger injection of 42 Bcf.
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