Summer doldrums appear to be settling into the cash market. Hot temperatures continued to pervade the national forecast Wednesday, keeping most points afloat with small gains. A short-lived heat spurt in the Northeast was already in retreat, resulting in some double-digit losses at regional citygates, and some Rockies/California points were slightly softer as well.
A large part of the cash market relied on continuing heat and the previous day’s gain of 4.5 cents by August futures in ranging from flat to about a nickel higher. The Northeast had most of the larger losses that ran from 2-3 cents to nearly 35 cents.
Cash trading can count on further screen support Thursday after prompt-month futures tacked on another 7 cents (see related story).
When Tennessee lifted a Balancing Alert OFO for market-area zones 5 and 6, that left no major transportation restrictions in place, although Westcoast said high linepack remained a problem Wednesday, much as it had been in the previous week.
However, Florida Gas Transmission (FGT) said there was a potential Overage Alert Day in store because of forecasts of mid-90s highs in its market area. Production-area numbers into FGT Zones 2 and 3 recorded some of the day’s biggest gains of about a nickel as a result.
The National Hurricane Center said a low-pressure area about 50 miles east-northeast of Veracruz, Mexico had a 50% chance of development before moving into central Mexico later Wednesday. Otherwise the agency had no other Atlantic Basin tropical activity to report.
A Midwest cooldown was about to reverse, but regional highs still would remain just comfortably warm in the 70s Thursday. The Northeast also was cooling a bit, but only into the mid 80s in New York City, according to Weather Central. The outlook was pretty much status quo elsewhere: hot from the Southeast through the desert Southwest, and mild to cool along the West Coast into the Pacific Northwest and Western Canada.
A utility buyer in the South said his company should be close to done with its storage refill program by the end of July, and might dip into those accounts a bit for current-burn needs in September and October if the market is favorable in that regard. Currently, things are quiet, he said, with no pipeline constraints of any substance to deal with.
Kyle Cooper of IAF Advisors said he anticipates a storage build of 77 Bcf to be reported for the week ending July 8.
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