Basis blowouts are getting to be an unwelcome habit for Rockies producers. The previous week had begun with triple-digit plunges that took most Rockies points to sub-$2 averages and then to less than a dollar the next day. On Tuesday the regional market wasted no time in getting off to sub-dollar pricing in post-holiday trading. Elsewhere, quotes were mostly softer but mixed with occasional gains of up to about half a dollar.

A low-end quote of 15 cents for CIG tied for the second time this year the all-time lowest spot market price recorded for both Kern River and Opal in April 2002. CIG also saw a 15-cent low on the trade date of June 4 (see Daily GPI, June 5). The bottom ends of the price ranges for Cheyenne Hub, Opal and Kern River Tuesday were 20 cents, 29 cents and 30 cents, respectively.

As usual, the Rockies problem is already limited takeaway capacity being exacerbated further by temporary pipeline constraints, according to Bentek Energy’s Rocco Canonica. For example, Trailblazer is reducing deliveries to Northern Natural Gas by 150 MMcf/d Wednesday, he said, while CIG will not be delivering to NGPL through Campo Lateral, which is worth about 180 MMcf/d. One of TransColorado’s three compressors at Dolores Compressor Station experienced mechanical failure Monday afternoon, prompting a force majeure declaration and limiting quantities through Segments 220 and 240, he added. TransColorado is restricting Primary firm and Secondary firm in-path service in those segments and not allowing Secondary firm out-of-path and ITS/AOR services.

In addition, there is the ongoing Muddy Creek South constraint on Northwest that will continue through Sept. 10, Canonica said. Producers were probably crying in their beer again after Tuesday’s price debacle, he said, but presumably they’ll be happier in a few months when Phase II of REX begins service.

Unlike last week, when Cheyenne Hub defied the general Rockies price malaise by virtue of its being the region’s primary outlet for gas moving eastward, this time the hub joined in the regional price plunge due to soft demand at Midcontinent/Midwest points.

The overall market saw mostly declines ranging from 2-3 cents to about C35 cents. The lack of widespread high levels of cooling load combined with storage abundance and lack of tropical storm threats to keep the trading mood generally bearish.

As in the case of Hurricane Dean, offshore U.S. production dodged another bullet. Late Friday afternoon after most traders had left their offices for the holiday weekend, Tropical Depression Six was designated and at the time had a chance of becoming a Gulf of Mexico threat. But even though it eventually became the very dangerous Category 5 Hurricane Felix, the storm crashed into Central America and stayed well away from the Gulf.

The Gulf Coast is receiving a fresh infusion of supply. A spokesman for Northern Natural Gas, operator of Matagorda Offshore Pipeline System (MOPS), confirmed that MOPS returned to full operations Tuesday. Efforts to restore service on the offshore Texas line since mid-July have been delayed several times by inclement weather or a leak; MOPS had been shut down since June 12 (see Daily GPI, July 20).

Although October futures were weaker during the morning, they managed a late rally to close 16.1 cents higher on what some considered a controversial weather model showing a chance of Felix managing to survive its sojourn through Central America and emerging from Mexico’s Bay of Campeche into the Gulf of Mexico (see futures story).

A Texas marketer said that with the screen making a show of strength following the end of cash trading, he thinks that will be enough to jump-start a rally in the physical market Wednesday. Cash prices will also have some cooling load support from seasonal temperatures in most areas, but there aren’t any heat waves in sight except out in California and the desert Southwest, he said.

The National Weather Service (NWS) expects warm weather in the eastern and western thirds of the U.S. and normal to cool conditions in the middle third. In its six- to 10-day forecast for the Sept. 10-14 workweek, the agency predicted above-normal temperatures everywhere east of a line from the western ends of New York state and Pennsylvania extending southwestward through central Ohio along the western ends of Kentucky and Tennessee and the northwest corner of Mississippi to include all of Louisiana except its northwest corner. The NWS forecast also calls for above-normal readings everywhere west of a line running southward from central Montana through western Wyoming and the eastern edge of Utah into central New Mexico. Below-normal temperatures are expected in a large oval encompassing most of the Dakotas and Minnesota and running southward into most of Oklahoma and the Texas Panhandle.

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