Prices declined by major amounts Tuesday as Tropical Storm Alex refused to become a hurricane and appeared determined to make landfall in northeastern Mexico, well clear of the Gulf of Mexico (GOM) production area. Also, heat levels, while still fairly warm in the southern U.S., had receded to some extent since last week.

Monday’s expiration-day decline of 14.4 cents by July futures obviously played a role in Tuesday’s cash market softness. Losses ranges from about a nickel to 30 cents or so. Most of the smallest declines occurred in the Rockies, while cooler forecasts in the Northeast were responsible for most of that region’s largest drops.

The cash market will again lack positive guidance from futures Wednesday after the new prompt-month August contract dropped 18.5 cents (see related story).

There were some reports of shut-in production due to Alex, but its impact was relatively negligible.

Florida Gas Transmission’s Overage Alert Day was the only significant pipeline restriction, but Northwest said it would begin barring interruptible injections into the Jackson Prairie storage facility Thursday (see Transportation Notes).

Ron Denhardt of Strategic Energy & Economic Research said he expects a storage injection of 65 Bcf to be reported for the week ending June 25.

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