The cash market continued to confound some people with its renewed strength Thursday, which several traders said appeared to be primarily psychological and associated with the appearance of a tropical depression in the mid-Atlantic. A screen gain of nearly 9 cents also provided support, and despite dwindling air conditioning load in other areas, power generation demand remained strong in the South.

Thursday’s upticks were mixed geographically and tended to range from about a nickel to a little more than 20 cents. Only downturns at the Southern California border, PG&E citygate, and Malin, where a California heat wave was abating slightly, varied from the overall firmness.

Way out on the Atlantic horizon (more specifically, about 760 miles east of the Windward Islands), Tropical Depression 2 was moving to the west-northwest around midday Thursday. If it reaches tropical storm strength, which could happen by the weekend, TD2 would get the moniker of Barry.

Some sources considered the depression much too remote at this point to have a legitimate impact on prices, yet conceded it was a major topic of discussion in the trading community. A marketer said TD2 was considered a fairly weak system, and he thought Wednesday afternoon’s AGA report of 110 Bcf in storage injections would be a major drag on cash numbers Thursday. “I guess some traders were looking ahead to about 60% of the United States having above normal temperatures in the first half of next week,” he said.

A Gulf Coast trader said that besides the impact of the potential Atlantic storm, cash firmness may have been based somewhat on “traders thinking that a hot summer has finally arrived and will continue through the rest of the season, at least in the South.”

More than one western source saw good potential for weekend OFOs being issued by the two major California LDCs today. “We’re expecting Southwest and California prices to be dropping substantially for the weekend, and if they do we’ll be buying as much gas as possible to stick into storage,” a marketer said. “Everybody here thinks prices will be moving down for most of the last half of July.”

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