Potential Gulf storm, heat in southern U.S. slightly outweigh negative screen guidance.

Monday’s cash market was a near repeat of the preceding one, with prices seeing little change in most cases but displaying a moderate bias to the upside. Forecasts of searing heat across much of the southern half of the U.S. supplemented by a fair amount of cooling load in northern market areas were accompanied by modest prospects of a Caribbean Sea system developing into the first named Atlantic storm of the year supporting the slight amount of bullishness.

The return of industrial demand from its weekend hiatus was also a supportive factor, but a 16.5-cent futures decline on the preceding Friday undoubtedly played a part in limiting the overall upticks.

Most points were flat to a little more than a dime higher. The Florida citygate’s dive of a little more than 65 cents, after Florida Gas Transmission ended a series of Overage Alert Days, was highly conspicuous among considerably smaller declines ranging from 2-3 cents to nearly a dime elsewhere.

Most of the modest losses were clustered in the Rockies, although Cheyenne Hub was something of an aberration in that market with the day’s largest increase.

July futures appeared to be headed for a rally Monday morning, but retreated after midday to a loss of 12.4 cents (see related story).

The National Hurricane Center accorded a “medium chance” (30%) of strengthening into a tropical cyclone within 48 hours to a “strong” tropical wave that was moving westward at 10-15 mph Monday through the eastern Caribbean Sea. Although “there is no evidence of a surface circulation, this system is showing some signs of organization and environmental conditions appear conducive for gradual development,” the agency said.

Most of the area from the desert Southwest through the Midcontinent and Lower Midwest to the South Atlantic coast could expect Tuesday highs around 90 or higher, with some locations likely to hit or exceed the century mark. It will be milder in the Northeast and Upper Midwest, but peak temperatures in the low to mid 80s are predicted to be fairly common.

Although Denver is forecast to participate in the general heat wave, much of the rest of the Rockies and Canada, along with the West Coast and northern Plains, are due to enjoy cool to relatively mild conditions.

In a rather bullish long-term signal, WSI Corp. said it expects a new La Nina event and other conditions to cause warmer-than-normal temperatures in much of the United States through September (see related story).

What a Houston-based marketer called the Caribbean’s “region of interest” and the near-term predictions of plentiful cooling load apparently weren’t all that bullish in the eyes of Nymex traders after they reversed Monday’s initial futures move higher. They may have been looking a little further down the road on the weather, he said; it may be pretty hot for now, but he had seen an eight- to 10-day forecast of cooling trends that should take highs back to the 70s in the Northeast.

The marketer said because of the screen decline he would expect cash to be mostly flat to a little softer Tuesday, but acknowledged that could change if the tropical wave shows increasing signs of development and keeps moving in the general direction of the Gulf of Mexico.

One rig departed from the U.S. gas search during the week ending June 18, dropping the total to 953, the Baker Hughes Rotary Rig Count reported. Three rigs left from the Gulf of Mexico, likely in association with the deepwater drilling moratorium due to the massive Macondo well leak, while two were added onshore. Baker Hughes said its latest tally is down 2% from a month ago but 38% higher than the year-earlier level.

Noting that the horizontal gas rig count is up 263 rigs (47%) since the beginning of the year, SunTrust Robinson Humphrey analysts said activity in shale plays fell by four last week. Specifically, they said, Barnett lost three, Fayetteville and Haynesville lost two each, Woodford lost one, Eagle Ford was unchanged and Marcellus gained four. The shale rig count is up more than 60% year-on-year (y/y) “largely attributable to robust activity in the Eagle Ford (+183% y/y), Haynesville (+73% y/y) and Marcellus (+74% y/y) shales,” the analysts added.

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