Prices were rising again Tuesday in mostly double-digit amounts, deriving support from a third straight day of screen firmness, a tropical wave nearing the eastern Caribbean Sea and substantial cooling load lingering in the West and South. Then the tropical wave’s promotion to Tropical Storm Claudette that afternoon seemed to assure that quotes would keep going up Wednesday and possibly beyond, according to several sources.

Tuesday’s advances were sizeable but generally smaller than the overall upturn of the day before. They tended to range from a little under a dime to a little more than 30 cents; most were within the range of 15-25 cents and geographically were spread out fairly evenly. Some Northeast citygates nudged the $6 level at their upper ends.

Cold fronts are due to start toning down high temperatures in the Northeast and Upper Midwest Wednesday, but air conditioning demand is expected to remain heavy across most of the southern half of the U.S. Heat was continuing to grow in California, according to a western marketer, and The Weather Channel said a string of six straight days of thermometer readings of 110 degrees or more in the Phoenix area “seems a good bet to continue through the weekend.”

A different type of weather factor was entrancing the market on the other side of the continent. Claudette became the third named storm of the Atlantic hurricane season Tuesday afternoon, and prompted issuance of a tropical storm warning by Jamaica and a tropical storm watch by the Cayman Islands. What the National Hurricane Center called “the poorly defined center” of Claudette was about 415 miles east-southeast of Kingston, Jamaica at 5 p.m. EDT and moving toward the west at nearly 29 mph. “Some strengthening is forecast during the next 24 hours,” NHC said.

Prior to mid-afternoon a couple of traders hesitated to make a call on Wednesday’s market direction. “I assume that if all this heat doesn’t go away, prices will be higher again,” the fuel buyer for a Southeast utility said, but she added that was far from a certainty. Then, following the Claudette christening, a western marketer said that despite seeing lower late quotes Tuesday at a couple of points, she expected the “storm psychology” and fresh screen support to keep prices on an uphill run Wednesday. There seems to be something about an Atlantic system getting a tropical storm name that makes traders sit up and pay much closer attention, the marketer commented.

According to an afternoon advisory by his colleague Kyle Cooper, noted Citigroup meteorologist Jon Davis “considers the chance of this storm impacting the energy operations in the northern Gulf of Mexico to be very low. Also, considering the current movement speed, it will be difficult for the storm to substantially strengthen.” (See additional Claudette analysis by consulting firm Weather 2000 in futures story below.)

A trader reporting a late downturn in Transwestern-Permian quotes said she was telling counterparties that “I could only take ‘TW Perm’ gas west near end, so prices went lower” because she and others had exhausted more lucrative options in the intrastate Texas and Midcontinent markets.

However, a Gulf Coast producer said he “had a little run today. It looks like some traders got caught in some lingering heat. Prices traded up most of the day.” But he had his doubts about further firmness, saying that by Wednesday evening “the East Coast will have a cold front coming on. That should pretty much put the kibosh on this mini-run.”

The producer continued, “The storage [report] estimates might have a little something extra due to the long weekend. Prices were down and load was off. If you were able to pack the gas in, you were looking good. This could be a bigger EIA number than most present estimates are saying. Sure, there are lots of factors and odd variables, but I don’t see any reason we couldn’t get a 115 [Bcf injection] or more.”

A Midcontinent trader reported this bearish message from his market crystal ball: “Who wants to buy in today? I know these prices are coming down soon. The Great Swami says the [Henry] Hub will be under five dollars within a week.”

The hottest months of the year are not quite living up to their reputation, according to an advisory from Weather 2000. “Temperatures across the central and eastern U.S. have displayed some substantial (and pleasant) warming to start off the month of July, contrasted to the extremely cool and dismal weather witnessed in May and most of June.For the time being, storminess is manifesting itself in the form of thunderstorms, squall lines and Mesoscale convective complexes, as opposed to closed lows and strata-form drizzle. Hence, strong summertime sun is penetrating to the surface [much] more frequently then we saw in the spring.

“As July and August are climatologically the hottest two months of the year for most of the nation, it is a good idea to refresh our memories as to what typical or average temperatures are before we raise our eyebrows at high temperatures announced on the evening news. For example, if New York City has six days breaking 90 degrees in July, with max temperatures averaging in the low 80s, that’s a cooler-than-normal July. If Washington, DC has 12 days breaking 90 degrees with max temperatures averaging in the mid-80s, that’s also a cooler-than-normal July. Keep in mind, June 2003 was about 3-5 degrees cooler than June 2002, so if July 2003 ends up 3-5 degrees cooler than July 2002, it will still be perceived as just as dramatic of a warm-up (turning on a dime) as last summer did. Yet in reality, both months this year (June, July) would still be cooler than normal.

“A more June 2003-like jet stream pattern should evolve shortly, along with embedded shortwaves helping to cool off the mid-July period from the Upper Midwest down to the Gulf and across to the Atlantic Seaboard. Whether the cooling derives from Canadian air masses (across the North), or sun-deprived cloudy/stormy days (across the South), this regime should pretty much clinch yet another below normal month for July 2003 for the eastern third of the nation.”

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