Monday’s huge surge of cash bullishness came to a near-standstill Tuesday, and several NGI sources indicated they expect a gradual price slide to begin Wednesday. Other than moderate increases in the Northeast, Rockies/Pacific Northwest and California and stronger gains in Western Canada, most points were flat to less than a nickel higher Tuesday (a few scattered small declines also were part of the mix).

Traders pointed to softness of the gas screen and in other energy futures contracts, along with a tendency of Tuesday’s cash numbers to drop by a dime or more as the morning went on, in explaining their feeling that prices had already peaked for the week. They also noted that a new tropical storm disruption of Gulf supplies was growing more unlikely. One acknowledged that cold weather in the Northeast and Midwest would keep heating demand strong in those regions, but he expected utilities to turn more to storage supplies rather than continue to pay higher prices for new production.

Describing prices as “bouncing around a bit,” a producer said they used Monday’s upward momentum to start high “but gave a lot back” as trading proceeded Tuesday. Yes, it’s unseasonably cold in the Northeast, he said, but that in itself probably won’t be able to sustain the early-week rally. “People are now talking about a cold early winter, with warmer weather likely in the second half,” the producer commented. That is making some, who had been sure as recently as the end of September of reaching 3.2 Tcf in storage by the end of injection season, change their minds and now say the industry probably won’t make it, he added.

But another source offered this observation: “We have never ridden the storage train all the way home. We just might get there this season, and if we do…well, traders can stop complaining about the high prices. Some traders speculate that there is more than 3.2 [Tcf of storage capacity] available” due to EIA’s calculation methods.

“It sure would seem like prices will be heading lower Wednesday,” conceded a Houston-based marketer. However, he suggested that paybacks to pipelines for Hurricane Lili-related shut-ins might keep any Gulf Coast softness minimal, or even possibly keep prices firm. But any remaining hurricane shut-ins are minimal and having essentially no market impact, he added.

Despite relatively mild weather remaining in the Calgary area, intra-Alberta and Westcoast Station 2 prices climbed by about C20 cents and nearly C80 cents respectively. A marketer attributed the strength to a continuing low-linepack situation in Northwest’s northern end, above the Kemmerer Station bottleneck in Wyoming.

A western buyer, noting a differential of more than 80 cents between San Juan prices in the $3.00s and Permian prices in the $3.90s, said it was the continuing shortfall of San Juan capacity due to maintenance that was chiefly responsible for the San Juan discount.

A Northeast trader said, “Liquidity is not that big a problem for us yet in making cash deals. But I’m looking at the ICE [IntercontinentalExchange] screen for swing swaps right now and 95% of it is red, which means I can’t trade with those people.”

Any potential shut-in threat of Tropical Depression Fourteen was diminishing as the system picked up speed Tuesday on a north-northeast track toward the Cayman Islands and central Cuba. The National Weather Service expects the depression to make a gradual turn to the northeast Wednesday, which would take it towards the Bahamas and away from the Gulf of Mexico production area. At 5 p.m. EDT Tuesday the poorly defined center of TD Fourteen was about 55 miles west-southwest of Grand Cayman.

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