Even with much of its cold weather support disappearing, thecash market still found cause for moderate bullishness Wednesday.But that’s expected to pale in comparison to the fireworks thatsources were predicting for today after the screen exploded withgains of more than 35 cents in both the November and Decembercontracts following AGA’s below-expectations storage report.

A futures increase in the vicinity of a dime during morning cashtrading helped make up for a general warming trend in most regionsexcept for the mountainous areas of the West, where winter stormwatches were posted at some points. Gains between a nickel and adime were prevalent in most markets, but prices were closer to flatin Northern California and at a few Northeast citygates. The onlysignificant decline of almost a dime occurred at the SouthernCalifornia border.

Most traders were expecting a storage figure close to last week’s78 Bcf injection, but AGA stunned them Wednesday with a report of 62Bcf. The folks at Nymex promptly sent November and December futuresskyrocketing more than a quarter higher beyond the morning dimegain. The extremely bullish reaction no doubt was supplemented by PIRAEnergy Group’s forecast of a 7 Bcf injection report next week (seeDaily GPI, Oct. 11), one source said.

“With the screen up nearly 40 cents this afternoon, you have toassume cash is going to follow it at least part-way Thursday,”according to a marketer. “People must be getting worried aboutstorage again.” A Gulf Coast producer was more specific, saying heexpects Henry Hub to trade today about a nickel less thanWednesday’s screen settlement, or in the mid $5.40s. That wouldrepresent a Hub jump of about 30 cents.

The rush of storage and futures news prompted a Calgary traderto remark, “People are getting both excited and nervous about whatmight happen this coming winter. One thing’s for sure: prices willbe hypervolatile. But what if the supply system fails, causing ahuge political stink?”

Stanfield and Sumas continued to derive strength from theTransCanada-British Columbia constraints being extended once more (seeTransportation Notes), noted a marketer,but they should start softening today, which is when the work isexpected to be completed.

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