Hotter

August natural gas is set to open 3 cents lower Thursday morning at $2.96 as traders focus more on near term temperature moderation and less on expected supportive government storage data. Overnight oil markets were narrowly mixed.

September natural gas is set to open 4 cents higher Monday morning at $4.00 as traders see a test of the upper end of the recent trading range and mull whether a seasonal low is now in place. Overnight oil markets gained.

Texas keeps getting hotter and drier, and aquifer water levels keep declining as homeowners, farmers and oil and gas drillers keep pumping water for their various uses. However, one water watcher told NGI he does not expect curtailments on water use for drilling/hydraulic fracturing (fracking) in the Eagle Ford Shale.

Texas keeps getting hotter and drier, and aquifer water levels keep declining as homeowners, farmers and oil and gas drillers keep pumping water for their various uses. However, one water watcher told NGI’s Shale Daily he does not expect curtailments on water use for drilling/hydraulic fracturing (fracking) in the Eagle Ford Shale.

Even with hotter weather spreading into the Northeast, prices continued to fall at all but a few points Wednesday. The previous day’s futures drop of 5.4 cents and growing concerns about soaring storage inventories portending limited options for placing spot gas down the road were believed to be the market’s chief bearish influences.

Natural gas prices of $10/MMBtu or higher in the last half of 2008 appear justified, given the colder-than-normal weather last winter, a hotter-than-normal early summer and significantly weaker imports of liquefied natural gas (LNG) and Canadian gas, an energy analyst said last week.

Natural gas prices of $10/MMBtu or higher in the last half of 2008 appear justified, given the colder-than-normal weather last winter, a hotter-than-normal early summer and significantly weaker imports of liquefied natural gas (LNG) and Canadian gas, an energy analyst said Monday.

Prices rose again at most points Tuesday as the spread of hotter weather was buttressed by the previous day’s 20.9-cent increase by July futures. However, the strength of Tuesday’s numbers was considerably subdued; whereas nearly all of Monday’s gains had been in double digits, most of them were a dime or less Wednesday.

Forecasts of more seasonal (that is, hotter) weather across the southern half of the United States, the previous Friday’s advance of 22.9 cents by July futures and the return of industrial load from its typical weekend reduction were responsible for strong cash market gains across the board Monday. Many hit triple digits and a few exceeded $2. Some buyers might want to argue that a bit of “storm hype” also was involved.