Prices rose again at most points Tuesday as the spread of hotter weather was buttressed by the previous day’s 20.9-cent increase by July futures. However, the strength of Tuesday’s numbers was considerably subdued; whereas nearly all of Monday’s gains had been in double digits, most of them were a dime or less Wednesday.

A solid majority of points were flat to about $1.05 higher, with all of the upticks of more than half a dollar occurring in the Rockies, where transportation curbs were easing a bit. Prices in the Rockies and the West in general continued to be supported by hot weather in most sections outside the coast and Pacific Northwest driving strong power generation demand.

A few scattered locations fell from about a nickel to a little more than 15 cents.

It was something of a toss-up in making a call on Wednesday’s market. Forecasts indicated that cooling load is getting stronger in the South, and the Northeast and Midwest are about to start chipping in some of their own as both New York City and Chicago are expected to see highs in the mid 80s Wednesday. However, the July futures contract will have negative guidance for Wednesday’s cash trading as it began the three-day countdown to expiration with a 19.2-cent decline (see related story).

Opal rebounded by slightly more than the $1.03 it had plunged on Monday. Although Questar Overthrust maintenance that restricted Rockies Express flows through the Wamsutter Hub to zero would continue through Wednesday, another constraint on outbound flows from the Rockies was eased when Northwest said it was lifting a realignment OFO at Meacham Compressor Station (see Transportation Notes).

Florida Gas Transmission warned market-area customers of the potential for an upcoming Overage Alert Day. The warning had negligible effect on Florida Gas Zone 1, which was up less than a nickel, but had more price-boosting impact in the rest of the production area and at the Florida citygate, which recorded one of the largest non-Rockies gains of nearly 35 cents.

Daniel Guertin of Lehman Brothers noted that a “slow warming trend” is in the forecast for the Midwest and East this week but said the strongest heat over the next one to two weeks will occur in the West. Compared to June 2007, the current month is expected to be about 15% warmer, Guertin said.

Weather in the Upper Midwest is “finally” starting to feel more like summer with daily highs around 80, said a marketer, but that’s being offset to a considerable extent by overnight lows in the 50s. Forecasters indicate that the region might get something of a mini-heat wave around the Fourth of July, with highs possibly approaching 100, she said, adding that what matters most to gas prices is how long the heat lasts.

The marketer said her company won’t know its Michigan citygate prices until Thursday because it trades monthly baseload on settlement-day futures basis.

Tim Evans of Citi Futures Perspective looks for storage additions of 90 Bcf, 80 Bcf and 90 Bcf to be reported for the weeks ending June 20, June 27 and July 4.

©Copyright 2008Intelligence Press Inc. All rights reserved. The preceding news reportmay not be republished or redistributed, in whole or in part, in anyform, without prior written consent of Intelligence Press, Inc.