Although cooling load was due to be fairly light in the northern market areas of the Midwest and Northeast and had diminished to some extent over the weekend in the Midcontinent, it remained strong across the southern third of the U.S. and was growing in some parts of the West. The result, abetted by the previous Friday’s 10.5-cent gain of expiring July futures and the return of industrial load from its usual weekend downturn, was higher prices in most of the cash market Monday.
The few points recording losses of 2-3 cents to about a dime were mostly in the Midwest, Northeast and Gulf Coast (the Florida citygate remained disconnected from the general market with a $2-plus dive). Points ranging from flat to about 40 cents higher tended to see the biggest increases in the West and Midcontinent.
Major strength in Nymex’s petroleum products complex failed to rub off on natural gas futures, as the August gas contract made its prompt-month debut Monday with a loss of 16.1 cents (see related story).
The West, which has mostly been wrestling with issues of excess supply in recent weeks, had a different experience as this week began. With interior California temperatures predicted to hit 100 or so, PG&E issued a low-inventory OFO for Monday and kept it in effect through at least Tuesday (see Transportation Notes). Gains of about a quarter and 35 cents at Malin and the PG&E citygate, respectively, were among Monday’s largest.
Meanwhile, with temperatures cooling slightly in its Florida market area, Florida Gas Transmission ended Saturday an Overage Alert Day that had been in effect since June 16 (see Transportation Notes). The Florida citygate, which had been soaring well above the rest of the market over the last couple of weeks, was coming back down to earth with a plunge of about $2.20 Monday and was not far above Northeast citygates.
Highs in the 90s or greater will continue to reign Tuesday across the southern tier of states. The Midcontinent will be in the low 90s, but that will represent cooler conditions than when the region was regularly approaching 100 last week.
The Midwest has entered a significant cooldown period, with highs of less than 70 predicted for Tuesday at some locations such as Cleveland. The lower Northeast will still have some moderately warm peak temperatures in the low 80s, but toward upstate New York and New England the pleasant 70s will dominate.
Besides the low-inventory situation with PG&E, markets in the West were also buoyed by forecasts of temperatures continuing to hit the mid 100s in the desert Southwest and starting to reach the century mark in inland California and the 90 area in parts of the Rockies. However, it will remain mild to cool along the California coast and in the Pacific Northwest and Western Canada.
While it wasn’t so good for company business, a Midwest utility buyer said it was nice for his area to have returned to highs around 80 with overnight lows in the mid 50s following a hot and humid stretch last week that saw peak temperatures reaching the mid to high 90s. For now it’s a rather bearish local forecast, he said, with no major heat in sight through at least the end of the week.
The buyer said he experienced a fairly easy bidweek. Baseload needs for July were fairly modest, so he was able to complete nearly all purchases into Northern Natural Gas early at index flat, although he did take advantage of softening numbers to pick up a late package at index minus 3 cents.
A tropical wave south of western Cuba that on Friday the National Hurricane Center thought had a chance of developing after it crossed Mexico’s Yucatan Peninsula during the weekend (see Daily GPI, June 29) had vanished by Monday, and there was no new Atlantic tropical activity to report, the agency said.
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