Most points registered double-digit losses ranging from a little more than a dime to about a quarter Monday. The exceptions of declines less than a dime tended to cluster in the Rockies and California, while significantly larger plunges of more than 30 cents and 80 cents were recorded at the Florida citygate and San Juan Basin respectively.

Power generation load had increased in much of the East over the weekend and was expected to last through at least part of Tuesday in the Northeast. But except for patches of heat in the South and desert Southwest, most other weather-related demand was expected to diminish Tuesday. Sources said screen weakness on Friday and initially Monday, along with Monday’s absence of storm threats to production, constituted the chief influences leading the cash market downward.

Tropical Storm Fay already was just an afterthought, with its remnants drenching South Texas Monday and expected to move into northern Mexico. It was replaced over the weekend by “Subtropical” Storm Gustav, which was about 220 miles south-southeast of Cape Hatteras, NC as of 5 p.m. EDT Monday, the National Weather Service said. But Gustav was expected to eventually take a turn to the north, which would take it away from the Gulf of Mexico and tend to cool off the Mid-Atlantic and Northeast states.

However, an East Coast utility buyer said that although prices were down overall, they were rallying “at the tail end” as the screen went from negative to positive. There was little cash business left to be done by then, but he expects the carryover effect to give cash a further lift Tuesday. He and other traders were a bit mystified about what caused the futures reversal, saying they weren’t aware of any news event behind it. One suggested that a moderate crude oil contract advance that kept it within shouting distance of the $30/bbl level may have been felt in the gas trading pit.

The utility buyer said there might have been “some storm hype” associated with Gustav involved in the Nymex rebound, but with Gustav heading toward the Carolinas and likely to turn north, “it looks like a really long shot to make it to the Gulf.”

Not coincidentally, a big decline at the Florida citygate was accompanied by Florida Gas Transmission’s lifting of a longstanding Overage Alert Day notice (see Transportation Notes). But a utility buyer in the state said there was no celebration about the lack of an OAD, adding that traders anticipated its return fairly soon. “I’m trying to figure out this screen reversal. I can’t see any good reason, but then there are a lot of mysteries in this market sometimes,” the buyer said.

Rockies quotes remained solidly under a dollar, although in general they saw Monday’s smallest drops. Chances of them seeing the high side of a dollar again anytime soon continued to look bleak as a 30-day period for all Interruptible Storage Service (ISS) to be removed from Questar’s Clay Basin facility began Monday (see Transportation Notes). It was “too early” for the Clay Basin withdrawals to have any market impact Monday, said a marketer who estimated the ISS volume at 1.5 Bcf. He noted that some customers might be able to transfer ISS gas to a firm account (either theirs or someone else’s), which would mitigate the impact and involve an inventory transfer rather than a physical withdrawal, which would be charged a fee. However, anyone selling to a holder of Clay Basin firm service would almost certainly have to accept a bargain basement price, the marketer said.

A couple of Rockies traders confessed to being a little in the dark about the situation at Opal Plant, where operational problems had caused a tailgate shortfall into Kern River starting late Thursday afternoon (see Transportation Notes). “I was losing a little gas over the weekend from Opal and still being cut through Cycle 1 today [Monday], but was pretty much restored to full for Cycle 2,” one said.

A Calgary-based source said intra-Alberta numbers were getting a late boost from the screen strength and eventually hit the C$3.60s. Local temperatures were quite comfortable in the 70s F. Monday after having fallen to near freezing at times last week, she said.

A western utility buyer offered this market outlook: “It’s too illiquid to hold steady with fundamental traders. It’s easy to muscle this market around. People can talk about fundamentals until they are blue in the face. The market goes where it wants because it can. As soon as Nymex goes to $3.30 everyone is bullish; anything below $3.10 and it’s all bearish. Everyone is buying, so everyone starts buying. Everyone is selling, so everyone starts selling. Bearish is a perfect time for a short position.”

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