The return of some extra heat, along with the general resumption of business-related demand after a weekend, were enough to generate a moderately strong rebound in the cash market Monday. Most of the increases ranged between a nickel and a quarter, but the removal of LDC OFOs allowed dollar-plus jumps at all California points except Malin.

Heat indexes in the Northeast will hit or surpass 100 degrees today and possibly through Wednesday, but they should be gone by Thursday. “That’s pretty much the way it’s been with summer heat in the region so far: a case of now you see it, now you don’t,” said a marketer.

A Midcontinent trader said cash is remaining strong relative to August futures, “but I certainly can’t see any real bullishness, though.” Post-weekend prices may be higher, he added, “but we’re still pretty much in the same range as last week.” He attributed Monday’s rally more to industrial and commercial demand returning following the weekend than to any substantial air-conditioning gain. Sure enough, a cold front moving southward through the Upper Midwest kept Monday’s citygate gains there among the smallest at around a nickel.

While it did not even qualify as a tropical wave yet, a broad low-pressure system west of Florida caught the attention of some traders. So far it has done little beside dump heavy rain on the Florida peninsula, but the National Weather Service said Sunday evening the system could be expected to move slowly northwestward and should be monitored. However, as of Monday afternoon forecasters thought the system most likely would take its rains up the East Coast and intensify only marginally if at all.

A western trader commented that CIG went out strong near the nomination deadline at $2.27-28. He observed that the Rockies in general have been able to shrug off some of their overall weakness and as a result have seen their discount to the Texas and Midcontinent markets narrow from first-of-month levels. One reason for this is that the variable cost of moving gas from the Rockies to San Juan-Blanco is only about 7-8 cents right now, making it feasible to increase southbound Rockies flows, the trader said. However, he thinks it will be interesting to see if the Rockies can hold onto this relative strength as storage continues to fill. “They have already begun to ratchet back maximum injections into Clay Basin from 320,000 MMBtu/d to 310,000 MMBtu/d.”

PG&E did not extend a high-linepack OFO beyond Saturday. SoCalGas kept an Overnominations Day notice, issued for Friday, in effect through Sunday but did not continue it past the weekend. The lifting of the OFOs yielded triple-digit upticks at the border and PG&E citygate, once again propelling them beyond Northeast citygates as the most expensive market.

A staffer at a large aggregator doesn’t look for much August business to get done until after midweek, pointing out that “after all, the Nymex close isn’t until Friday [so] we’ll still have two full trading days left early next week.” The August futures contract is about 20 cents below where July went off the board at $3.182, “so just on basis alone you have to figure August indexes will be further down,” he said. He expects Appalachian pipes Dominion and TCO to trade at a discount to index; a marketer said he anticipates similar index discounting for Chicago and MichCon citygates.

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