Weather-related demand remains somewhat meager, but the cashmarket found more than enough support Monday from superchargedenergy futures contracts and Atlantic storm activity to realizegains of about a dime or greater at nearly every point.

Besides a strong gas screen, an October crude oil futurescontract that soared above $35/bbl again gave an extra boost to thespot gas market. It was obvious that traders did not believe OPEC’sweekend vow to inject another 800,000 bbl/d into the world’s crudesupply would be sufficient to alleviate energy shortfall problemslooming for this winter, one source said. That market mood alsogenerated a big increase in heating oil futures.

Gas futures appeared to be losing a bit of their oomph aftercash trading closed for the morning, but then rallied again in theafternoon following the National Weather Service’s declaration thata tropical depression about midway between Bermuda and theCarolinas had developed into Tropical Storm Florence, theAtlantic’s sixth named storm of the year. Florence was less than400 miles south-southeast of North Carolina’s Cape HatterasNational Seashore and moving slowly west-southwest.

The storm has a lot of land mass to traverse in the Carolinas,Georgia and/or Florida before reaching the Gulf of Mexico, but sucha feat is conceivable if it strengthens enough before going ashore,a trader said. Meanwhile, he quipped, “I think the market is goingto go with the ‘Flo’.”

A marketer trading Texas Eastern M-3 in the high $5.20slamented, “These $5-plus prices have just been insane.” He was at aloss to understand why Northeast prices remain so high when theregion has been unseasonably cool virtually all summer.

Sumas was about the only point registering an increase of lessthan a nickel Monday. It was receiving extra supplies from PineRiver Plant, where Westcoast said a force majeure event thatprevented the plant from reaching 75% capacity in the early stagesof its annual turnaround had been resolved late Friday evening.

A western trader doesn’t expect much market impact from El Pasoshortening this week’s storage facility outage by two days (see Transportation Notes), but said it could bea little bearish for San Juan Basin gas since the pipeline found itunnecessary to issue an OFO with the outage beginning today.

Storage demand played a significant role in sending SouthernCalifornia border and PG&E citygate numbers up nearly 20 cents, alarge marketer said. SoCal Gas storage stands at only 57 Bcf comparedwith 65 Bcf at this time last year, he said. Also playing intotraders’ strategy was the fact that swing prices began Monday’ssession at a discount to first-of-month levels, he noted, adding”Index has proved to be a pretty good resistance level for the firstpart of September.” (Daily GPI readers can check out that marketdevelopment with the graphing feature available in the features areaat intelligencepress.com).

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