Cash prices rebounded by double-digit amounts at all points Monday in response to a surface low-pressure area in the southern Gulf of Mexico moving northward toward the Texas coast and heat levels returning to seasonable levels in the Northeast and Midwest market areas.

While the Northeast was not expected to see the high temperatures that caused human misery and record-setting power generation consumption a week earlier, citygates in the region tended to record many of Monday’s largest gains. But all increases were substantial in ranging from a little less than 40 cents to about 70 cents.

Other supportive factors for the cash market were the return of industrial demand from its usual weekend hiatus and a modest screen gain of a little less than a nickel on the preceding Friday.

The National Hurricane Center (NHC) said the tropical disturbance was centered east of La Pesca, Mexico Monday afternoon and was headed north at 5-10 mph. Buoys in the southwestern Gulf of Mexico had recorded gusts of 40-50 mph that morning, NHC said. With upper-level winds expected to become a little more favorable, “a tropical depression could develop during the next day or so if the low-pressure center remains offshore,” it added.

No offshore evacuations had been reported as of Monday afternoon, and The Weather Channel indicated that it did not expect the disturbance to have much more impact than bringing heavy (and cooling) rains Tuesday to southern and possibly eastern Texas.

Following California’s setting an all-time record for electricity consumption in the previous week, the California Independent System Operator declared a Stage One power alert Monday morning and upgrade it to a Stage Two alert later in the day (see story in Power Market Today). Unless energy conservation was extensive, rolling blackouts were a distinct possibility, state officials said. The ISO was on track to break the record demand of 49,036 MW it incurred last Friday by a whopping 3,000 MW or so.

The impact on California’s demand for gas was already showing up. According to Bentek Energy’s analysis of flows at 14 market hub points (https://intelligencepress.com/features/bentek/), Monday’s nominated volumes at the Southern California border and the PG&E citygate were up 143,000 MMBtu/d and 154,000 MMBtu/d, respectively, from Friday. They were the only two of the 14 points where flows increased more than 37,000 MMBtu/d.

While most of the nation’s highest heat levels currently reside in the interior West, the National Weather Service expects more of the hot weather to have shifted eastward later this week. By the weekend.above normal temperatures should be occupying nearly all of the eastern three-fourths of the U.S., it said.

This disturbance in the Gulf of Mexico has the potential to form a named storm, and oil has come back to life again, said a Northeast marketer who noted that crude oil for September delivery had managed to settle above $75/bbl. “That certainly has aided and abetted” both the futures and cash moves higher (the screen spiked another 46.6 cents Monday), he said. The market has seen “schizophrenic activity on the screen over the last couple of weeks,” and he expected that to continue. Northeast temperatures won’t be “scorching like last week,” he said, but a little bit of heat is returning, so power generation load was fairly strong again.

All was still quiet on the bidweek front for the marketer, who said his company was not doing anything yet for August.

A Midwestern marketer believed that imbalance resolutions added some bullishness to Monday’s prices. “I think the weekend was warmer than expected” in the Midcontinent and Midwest, he said, because there were some people trying to make intraday deals Monday to rectify weekend imbalances. A couple of power plants that his company deals with were running over the weekend that hadn’t been expected to do so, he said. Area temperatures were back in the 90s Monday, he said, but that was milder than the highly unusual two consecutive days last week when they surpassed 100.

The marketer reported seeing a few Chicago basis deals for August getting done Monday at minus 20 cents, but said that was about all so far. Tuesday (when the three-day screen settlement countdown begins) and Wednesday should be the heaviest trading days for August business, he said.

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