Chiefly reflecting the previous Friday’s 11.5-cent rebound by October futures and the return of industrial load from its usual weekend hiatus, prices rose at a large majority of points Monday.
Gains were fairly substantial in most cases as most of the market was flat to about a quarter higher (a half-dollar increase by the Florida citygate again was considerably outside the general market trend). A few losses of about a nickel to 15 cents or so were concentrated in the Rockies.
The cash market will have positive futures guidance again Tuesday after the prompt-month contract rose another 5.5 cents Monday (see related story).
The market continued to have little in the way of fundamental weather support as fall-like conditions continued to dominate the North American forecasts. Parts of the desert Southwest, where such locations as Phoenix are starting to top out in the low to mid 100s again, were the sole source of major cooling demand.
Though some sections of the South could expect highs slightly exceeding 90 Tuesday, that was still a bit subpar for the first half of September in the region. Otherwise, mild to cool forecasts dominated the rest of the market.
Although a near-term threat to Gulf of Mexico production still appeared remote, there may have been some psychological bullishness from an active Atlantic tropical outlook. Hurricane Igor and Tropical Storm Julia were still in the middle Atlantic and southwest of the Cape Verde Islands, respectively, the National Hurricane Center (NHC) said Monday. Also, both storms were expected to be mostly on the demand-destroying side as their projected trackings take them northward off the East Coast later this week and deliver cooling rains.
Of more immediate concern to offshore producers was a broad area of low pressure over the west-central Caribbean Sea, which NHC accorded a medium chance (40%) of becoming a tropical cyclone during the succeeding 48 hours. However, this system was expected to pass over Mexico’s Yucatan Peninsula and then go ashore again in Central America.
With both Tennessee and El Paso ending restrictions related to high linepack (see Transportation Notes), no substantive pipeline constraints remained in effect Monday.
IntercontinentalExchange (ICE) found Texas Eastern M-3 volumes traded on its online platform shrinking from 287,400 MMBtu for the weekend to 236,300 MMBtu Monday. However, ICE said, the Transco Zone 6-New York pool rose from 102,100 MMBtu to 123,600 MMBtu in the same trading periods.
ICE recorded several of its largest gains in the Midcontinent/Midwest, with such locations as Northern Natural-demarc and Ventura rising nearly a quarter each. The day’s only significant losses of about a nickel were in the Rockies at CIG, Kern River and Opal, ICE said.
A Midwest utility buyer said cooler and “very comfortable” area conditions left her company essentially just “coasting along” while waiting for some cooling degree days to arrive. Temperatures were getting down into the 50s at night, she said, but that was not nearly cold enough to inspire many customers to turn on their furnaces.
With power generation load down to near zero, the utility was mainly concentrating on finishing its annual storage refill, the buyer said. Accounts are now around 75% full with six weeks left in the injection season, she added.
A marketer in the Upper Midwest said her area was staying cool for now and had no prospects of significant warming through at least early next week. She said she could detect almost no cooling load at all throughout the Midwest.
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