Gas buyers certainly had no complaints about “storm hype”keeping prices artificially high Tuesday. Even with one of the mostdangerous hurricanes of the century pounding the Bahamas andbearing down on the southeastern U.S., its relative lack of threatto Gulf of Mexico production did nothing to avert cash price dropsof a dime or more-sometimes much more-in nearly every market. Onlythe Northern California points (Malin and PG&E citygate)managed to keep their declines in single digits, and even they fellalmost a dime.

A futures drop of almost 15 cents combined with mild-to-cooltemperatures in all markets outside the desert Southwest to depresscash quotes severely, sources said. Some of the largest declines of20 cents-plus occurred at Northeast citygates and in NorthernNatural’s chilly market area (demarc and Ventura). Waha also wasamong the weaker points, getting little support from intrastateTexas air conditioning load after a front had cooled off the LoneStar state.

Noting the way the weather was trending, a Midcontinent marketersuggested enough cooling load might be developing to prevent anyfurther price falls. Barring any more hurricane hype, “prices willtrade at these levels for a while,” he said. “They will not reachLabor Day weekend lows again.”

Meanwhile, though, it’s 75 degrees in Oklahoma and demand isnon-existent, the marketer went on. He was seeing spot prices inthe Midcontinent mostly in the high $2.40s Tuesday, “and that’spretty good value for 75-degree weather.” Prices tried to bottomout early in the morning, falling to the low $2.40s beforefinishing on either side of $2.50, he said.

A couple of western traders noted an up-down-up yo-yo type ofpattern in Southwest basin numbers, agreeing that supply squeezeswere bringing prices back up in the late going. But for aNortheast/Gulf Coast source, it was prices “falling all the way forthe third [trading] day in a row.”

A minute chance remained that Hurricane Floyd, still a Category4 storm, could veer sharply west and reach the Gulf, butforecasters continued to project a path northward off the Floridacoast with resultant landfall likely in Georgia or the Carolinas.Hurricane Gert was strengthening but still about 1,000 miles eastof the Lesser Antilles.

A Gulf Coast marketer who reported losing “a lot” of demand inFlorida as businesses shut down in advance of Floyd may havethought it odd that Florida Gas Transmission declared alow-linepack OFO for its market area (see Transportation Notes).But FGT operator Enron had a ready explanation. As hurricaneprecautions, power utilities in Florida were shutting down theirnuclear plants “probably under the assumption that a leaking nukewould be more serious than leaking natural gas,” a spokesman said.As a result, the utilities were maximizing their gas takes,prompting the OFO, he added.

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