Cash prices were taking on a considerably more bearish tone Tuesday, with most points experiencing sizeable declines. The demand destruction from Hurricane Ike, along with generally mild to cool weather outside the interior West, was proving to have more influence on the market than the Gulf of Mexico shut-ins, which still totaled more than 6 Bcf/d.

Most of the market was a couple of pennies lower to down a little more than $1.30. The Midcontinent along with South and East Texas points tended to see the largest drops. Although the West overall was strongest of the regional markets, quotes in West Texas (El Paso-Permian, Transwestern and Waha) saw double-digit dips due to the lingering cool weather and generation outages left behind by Hurricane Ike.

The most conspicuous exceptions to overall weakness were big rebounds in the Rockies and to a lesser extent in most of the rest of the West (a few scattered eastern points were also firmer). Gains ranged from a little less than a nickel to more than two dollars. The Weather Channel said above-average temperatures would prevail Tuesday north of a Reno-Salt Lake City-Denver line, and although readings to the south would be “near to a tad below average,” that still meant highs in the 90s and occasionally 100s in the desert Southwest.

Although conditions are due to be mostly dry in the South and Northeast Wednesday, both regions are seeing below-average temperatures currently. That merely means comfortable in the South, but a cold front is bringing noticeable chill to the Northeast. Frost and freeze advisories were posted for Wednesday morning for the Adirondacks and northwest Maine, TWC said, but during the day temperatures were expected to recover to seasonal levels.

The Midwest was glad to see the flooding effects of Ike’s remnants depart, leaving behind seasonal temperatures that are on the cool side.

Henry Hub was trading again on IntercontinentalExchange and in the cash market after hub operator Sabine Pipe Line lifted its force majeure Tuesday for all remaining points and said it would begin accepting intraday nominations, including for Henry Hub, at 5 p.m. CDT. However, volumes at the hub were limited due to a lack of compression (see Transportation Notes). No deals were made at the point Monday due to a shutdown of the entire Sabine system.

The Gulf of Mexico (GOM) offshore recovery from the one-two punch of hurricanes Gustav and Ike continued Tuesday. Minerals Management Service (MMS) said it got reports from 84 companies indicating that shut-in gas totaled 6,231 MMcf/d, down from 6,942 MMcf/d reported as off-line Monday. The pace of oil production restoration was going much more slowly, with Tuesday’s shut-in tally of 1,263,730 b/d being only marginally lower than the 1,298,309 b/d reported Monday. MMS also said 498 platforms and 71 mobile drilling rigs were still evacuated (see related story).

Considering outdated voice-mail messages from last week or busy signals on a few phones, it was likely that some Houston-area traders are continuing to work off-site away from their offices.

With the major rallies in the Rockies Tuesday, points there joined Florida Gas Zone 3 and the Florida citygate as the only locations trading at premiums to first-of-month indexes instead of mostly large discounts.

Now that peace and quiet are reigning (at least temporarily) in the 2008 Atlantic tropical scene, Weather 2000 felt like it was time to sit back and take stock. It noted that more than simply statistics or records for the annals of history, these highlights should be taken as harbingers:

The New York City-based consulting firm noted it had cautioned in April that “it has literally been decades since a direct hurricane hit has been made on major hubs such as Houston/Galveston,” and such coastal communities remain at high risk when recent steering patterns and warm GOM sea surface temperatures exist. Notably, only three hurricanes of Category Four or Five strength have struck anywhere from Brownsville, TX, to Tampa, FL, since 1950, the last being Camille in 1969, so “worse” impacts than Ike’s are “unfortunately meteorologically feasible.”

It’s hardly surprising to see a lot of price softness, said a Calgary-based producer who added that his area was enjoying “beautiful weather in the mid 70s.” There’s very little weather-based load in most areas, he said.

The producer said he was starting to see transportation backing up gas in the Midcontinent/Midwest region, and that was worrying him a bit. However, he said, there was some relief Tuesday as the desire to move gas from the Rockies to the Midwest diminished a bit. There’s some warm temperatures from the Front Range of the Rockies into the Pacific Northwest, he said. He thought the combination of sizeable shut-ins this month by Rockies producers due to transport constraints on Rockies Express and other pipes and the extra cooling load that is arriving helped the Rockies rebounds Tuesday. “It’s still not $5 gas,” he observed, but prices are higher than they had been.

Citi Futures Perspective analyst Tim Evan is predicting storage additions of 63 Bcf, 80 Bcf and 95 Bcf to be reported for the weeks ending Sept. 12, Sept. 19 and Sept. 26, respectively. Evans said the large number for the week ending Sept. 26 is because he “penciling in a recovery of natural gas production over the course of the current week, which will combine with some relatively normal temperatures to allow a larger than normal net injection” for that week.

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