Rather improbably, since cooling demand remains moderately subpar for early July outside the western U.S. and a holiday flow date was involved, prices rose in most of the cash market Tuesday. A few points that were flat to down about 15 cents extended a recent trend of mixed price movement nearly every day.

Gains that ranged from a couple of pennies to about 20 cents tended to be strongest in the Gulf Coast and Northeast.

August futures continued to provide essentially neutral guidance for the cash market. After falling by almost a cent on Monday, the prompt-month contract continued its slide by an even penny Tuesday.

It was curious that the West, which currently has by far the most bullish weather fundamentals and no significant excess supply/transportation constraint problems like the ones that have depressed regional pricing — especially in the Rockies — in recent weeks, would be the market area with the smallest price increases and most of the softening points. The Weather Channel noted that with the exception of the immediate coastal areas and higher mountain ranges, the West would be “blisteringly hot” during the Independence Day holiday. “Triple-digit heat will reach as far north as eastern Oregon-southern Idaho border areas,” the forecaster said. “Many record highs are anticipated.”

Meanwhile, most of Tuesday’s Northeast citygate advances were in double digits despite predicted highs not getting above the 70s. The South is warmer than that, but few parts of it were forecast to exceed 90 degrees Wednesday — in a region where highs in the 90s are routine throughout the July-August period. The Midcontinent/Midwest could expect to reach the low 90s Wednesday in some sections, but largely would peak in the 80s.

Florida Gas Transmission, which usually is issuing Overage Alert Days during the summer when its Florida market area gets very hot, told customers that forecasts of cooling rains in the state and high linepack could prompt it to issue an Underage Alert Day as early as the Fourth of July.

The rapid pace of storage refill was reflected in a weekly posting by Southern Natural Gas. Less than half-way through the traditional injection season, Southern reported that as of June 28, working gas inventory in its two storage fields stood at 46.7 Bcf, or 78% of total capacity of 60.0 Bcf. Actually, that was less than on June 29, 2006, when the volume was 48.0 Bcf (80%), but well above the more representative 37.3 Bcf (62%) level on June 30, 2005.

As usual on the eve of a holiday period, trading tended to go faster than usual and many traders left their offices by mid-afternoon or earlier. “Everybody finished up early and there’s a mass exodus going on,” the marketer for several independent producers said shortly before noon Tuesday. It surprised her company very much to find cash prices up a dime or so on the Gulf Coast pipes that she trades. Since power generation load for air conditioning wasn’t expected to rise appreciably until near the end of the week, she suspected that most of the price-boosting purchases were targeted for storage injections.

The marketer acknowledged that a similar scenario didn’t pan out last year, but said she was once again starting to worry about a potential price crash around September when many storage facilities will be getting full and that option for placing her producer clients’ gas will be extremely scarce.

The National Weather Service (NWS) expects above-normal temperatures during the July 9-13 workweek everywhere west of a line running southward through western Montana, along the western edge of Wyoming and through central Utah and Arizona. The agency also predicted above-normal readings in Georgia, the Carolinas, Virginia, Kentucky, Tennessee, the northern three-fourths of Alabama and northeast Mississippi. Below normal temperatures are due in the Dakotas, Minnesota and Wisconsin; in South, Central and North Texas along with the southwestern half of Louisiana; the southern end of the Florida peninsula; and in all of New England except Connecticut, NWS said.

Citigroup analyst Tim Evans projects storage additions of 88 Bcf, 95 Bcf and 68 Bcf for the weeks ending June 29, July 6 and July 13, respectively.

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