The weather fundamentals didn’t seem to be there, and the screen had extended a three-day slide with a drop of 35.6 cents the day before (adding a loss of another nickel Wednesday). But a mixed cash market showed a moderate bias to the upside Wednesday.
As a marketer had predicted Tuesday, Wednesday’s quotes mostly showed little change from flat. But he had expected mild softness instead of mild firmness to dominate. A majority of points ranged from flat to about a quarter higher; most of the gains were less than a dime. Most of the losses that ran as high as 15 cents were concentrated in the West and Midcontinent.
Despite what appeared to be a fairly unsupportive price environment, a source suggested that storage buying likely was a factor in the market’s light show of strength. Noting the two unprecedented midsummer storage withdrawals reported twice in the last three weeks and the Opal Plant outage last week that took nearly 1.2 Bcf/d off the market in the West for nearly two days, he said some injection capacity has been created and some traders probably are replacing gas that they pulled during the recent widespread heat waves.
Also, he added, prices had taken substantial drops at nearly all points over the previous two trading days, and there was some feeling that that represented sufficient consolidation for the time being.
The market does not totally lack for heat-driven power generation load. But outside Oklahoma, Texas and the desert Southwest, triple-digit high temperatures will be rare Wednesday. Pleasant conditions will dominate in the key market areas of the Midwest and the Northeast.
Florida Gas Transmission’s declaring an Overage Alert Day Tuesday was enough to raise Florida Gas Zone 3 numbers by a little more than a dime.
The Atlantic Basin scene could see the formation of a tropical depression several hundred miles east of Florida over the next day or two, but that was hardly a reason for even mild cash price bullishness. Also, a large cluster of thunderstorms developed in the north-central Gulf of Mexico late Tuesday morning and if they persisted overnight, a depression could develop fairly rapidly, The Weather Channel said. However, currently surface pressures are fairly high, it added.
Most of the eastern U.S. will experience normal temperatures during the Aug. 21-25 workweek, according to the National Weather Service (NWS). The only area where it expects below normal conditions is in the western halves of Oklahoma and Texas and the southeast half of New Mexico. Excluding New Mexico, the eastern half of Arizona and the southern half of Colorado, NWS looks for above normal temperatures throughout the rest of the West and extending through the Upper Plains into all but the southern edge of the Midwest. It also predicts above normal readings in peninsular Florida.
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