A cold front moving in to cool off the previously sizzling Northeast and huge negative pressure from Monday’s screen plunge helped ensure that cash prices fell Tuesday at all points except one, which saw a tiny gain.

After leading most of the market higher Monday when there was one more day of extreme, grid-challenging heat to get past, Northeast citygates reacted to the approaching relief by leading Tuesday’s slide with dives that hit a dollar at Transco Zone 6-New York City. Otherwise, losses ran as low as a nickel or so. Most of the declines in between were in double digits.

Any chance of a rebound Wednesday is considered unlikely due to the loss of power generation load in a heavy-usage market area and August natural gas futures dropping another 22.8 cents Tuesday. For a chance the gas and petroleum futures markets were in synch, as August crude oil nosedived $1.76 to $73.54/bbl. The descent was made even more spectacular by coming from the prompt-month contract trading more than a dollar above Monday’s close early in the day.

Storage bearishness also will keep weighing on prices. Northwest’s Jackson Prairie facility is bumping up against its capacity limit already. And MichCon deliveries, while up 8,000 MMBtu/d Tuesday from the day before, continue to run at ever-smaller fractions of year-ago levels due to Michigan storage having little space left. MichCon flows of 131,000 MMBtu/d Tuesday were nearly 500,000 MMBtu/d less than the 628,000 MMBtu/d month-to-date average of July 2005, according to Bentek Energy (https://intelligencepress.com/features/bentek/).

Most of the smallest drops (and the single uptick) occurred in the Rockies/San Juan/Pacific Northwest region, where western high heat will keep air conditioners purring. However, while much of inland California was forecast to continue reaching 100-degree-plus highs Wednesday, California losses were more substantial in ranging from a quarter to a little more than 37 cents.

Contrary to the Northeast’s cooldown, the Midwest is due to take peak temperatures 5-6 degrees higher Wednesday. But that was a slight aberration, explained an Upper Midwest marketer. “We had some severe thunderstorms come through” overnight and cool things off, so Tuesday’s high temperatures took a dip into the mid 80s, but with the rains stopped more normal highs around 90 will be reappearing Wednesday, she said.

The marketer added that her company was glad to see the screen heading in their desired direction again.

It’s cooling down a little in the Northeast, and that’s helping take the rest of the market lower, said a Houston-based marketer. Unlike Monday, cash numbers were mostly moving down near the end Tuesday, and that usually points the way for price direction the next day, he said. He sees little chance for another rally any time soon, he continued, “but you never know” if the oil market is going to explode and finally take gas along with it.

Market area prices were so high Monday that people didn’t care what they paid in the production area, said a Gulf Coast producer. They could easily cover their transport costs with a tidy sum left over, he said, noting that at one point Monday there was a spread of about $2 from Henry Hub to Transco Zone 6-NYC. Obviously the situation was changing quite a bit Tuesday, but there were still some $1-plus spreads to exploit, he said.

With cooling load diminishing in the Northeast and generally normal heat for mid-July in the South and Midwest, along with the screen extending Monday’s loss, the producer considered it a safe bet to expect another down day in cash Wednesday.

The formation of Tropical Depression Two and its subsequent upgrade to Tropical Storm Beryl off the North Carolina coast was of interest because it was the second named storm of a 2006 Atlantic hurricane season that is developing considerably more slowly than last year’s. But any threat to Gulf of Mexico production was virtually nil, as the storm was moving northward off the East Coast Tuesday afternoon.

The National Hurricane Center’s “five-day cone” (its projected tracking of Beryl’s path over the next five days) calls for the disturbance to approach easternmost North Carolina by early Thursday without actually coming ashore and then to eventually veer northeastward out to sea off southern Maryland.

The West will remain hot during the July 24-28 workweek while the nation’s midsection will get a chance to cool off, according to the National Weather Service’s (NWS) six-to-10-day forecast issued Tuesday. Along with above normal temperatures predicted for most of the Florida peninsula, the agency expects similar conditions everywhere west of a line running north from West Texas through central New Mexico and Colorado and then eastern Wyoming and Colorado. States along the East Coast should see normal readings, while a large area of below normal temperatures will begin just west of those states and extend from the Gulf Coast to the Canada border. The below normal area should extend as far west as the Midcontinent and western Midwest.

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