“It’s beginning to look a lot like summer.” Christmas may still be six months away, but forgive one source for being reminded of a holiday carol in assessing why cash prices spiked across the board Tuesday.

With an advance of nearly 80 cents, the Southern California border was easily top dog on the price escalator. Other gains tended to range from 20 cents to nearly 60 cents, with those of 30-50 cents being most common.

In addition to the rising mercury levels in several areas, the physical market got ancillary support from soaring energy futures that practically guarantee a continuation of rising cash numbers Wednesday, a couple of traders agreed. The natural gas contract’s jump of 27.6 cents was largely a byproduct of skyrocketing prices among the petroleum products at Nymex that had crude oil for August nearing the $40/bbl level again. Heating oil and unleaded gasoline also saw huge rises as oil markets faced a triple supply whammy: further pipeline damage in Iraq over the weekend that approximately halved the nation’s export capacity; threats of labor unrest in Nigeria that prompted a French company to declare a force majeure for exports of 225,000 bbl/d; and the possibility of bankruptcy for one of Russia’s largest oil producers and exporters.

Although conditions in much of the East are starting to feel more “summery” than before, “heat wave” were not the words that came to mind other than in the desert Southwest, where 100-degree-plus peaks remain common. But although the South isn’t totally free of the thunderstorms that kept its temperatures subdued through most of the last half of June, highs in the low to mid 90s are now status quo throughout the region.

The Midwest and Northeast participated in the overall price uprising despite seeing only rather modest elevations in temperature levels. Not only that, a cold front will be pushing into the Northeast Wednesday, and according to The Weather Channel, temps “will continue to run well below seasonal expectations” in most of the central Plains and western reaches of the Midwest.

But there was no denying that the Northeast is starting to see more air conditioning load this week, said a utility buyer in the region. While still buying enough for system supply, his company continued to make sales, responding to storage demand in Tennessee Zone 4 (Pennsylvania and Ohio). Lately he has been seeing sales divide into mostly storage load on Tennessee and mostly power generation load on Transco in the market area.

A marketer was “definitely” finding more buying by power generators in the Midcontinent, but said the intrastate Texas market actually hadn’t changed much from late last week. “It’s not especially hot yet” in North and West Texas, and despite a recent siege of rain having caused flooding problems around the Dallas-Fort Worth metroplex, the area was getting yet more rain Tuesday, she said.

The western market had two positive price developments going for it: the high-linepack that PG&E had declared for Saturday was in effect that day only; and Kern River reported normal linepack in all four segments Tuesday in contrast to the high levels it has frequently experienced in the last couple of months.

The first activity in the 2004 Atlantic hurricane season in which forecasters see some potential for development has arisen. But the cluster of thunderstorms and showers that is being monitored is several hundred miles south of the Cape Verde Islands, which are closer to West Africa than to the U.S.

Citigroup’s Kyle Cooper said his final estimation for Thursday’s storage report looks for a net injection between 93 and 103 Bcf, which would compare with a year-ago build of 111 Bcf. Other analysts may report the year-earlier volume at 147 Bcf, Cooper said, but that’s because there was a 36 Bcf revision at that time. “From a temperature-adjusted basis, our primary analysis is based on ACTUAL weekly changes and that change last year was 111 Bcf,” he went on. “From a total working gas comparison, the 147 Bcf is valid.”

©Copyright 2004 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.