Justification was difficult, but it couldn't be denied: prices rose across the board Wednesday, with nearly all of the gains in double digits.
Except for hot weather in parts of the desert Southwest, seasonal fall conditions were expected to dominate most of the rest of North America through Thursday. Yet the cash market ignored bearish fundamentals with gains across the board, nearly all of them in double digits. They ranged from about a dime to about 30 cents. Increases were fairly evenly spread across geographic areas, but the Rockies, Midcontinent and Northeast tended to see most of the largest upticks.
Thursday's cash trading will get a little extra prior-day futures support after Nymex's prompt-month contract rose another 6.7 cents (see related story).
Hurricane Paula had graduated to a Category 2 storm before swiping past the northeastern Yucatan Peninsula Wednesday, but it was still expected to veer northeastward into western Cuba, keeping it well away from the Gulf of Mexico production area. The National Hurricane Center had no other Atlantic tropical activity to report.
"Seasonal" remained the watchword for the overall weather outlook. Other than the Phoenix area of the desert Southwest making another attempt at reaching triple-digit temperatures, fall conditions are definitely in place. Even the South was topping out around 80 or less.
He couldn't "figure it out," said a Midwest marketer when asked about Wednesday's cash strength. Weather fundamentals were soft but prices were up strongly instead. The prior-day futures gain of 2.8 cents certainly wasn't much of a factor, he said.
The marketer said he could only assume that it might be "bottom-fishing" because gas prices have gotten so low that people are trying to stock up. He said his area still is not seeing "good agricultural drying load" yet.
IAF Advisors analyst Kyle Cooper estimated a 92 Bcf storage injection for the week ending Oct. 8, which he said would greatly exceed the year-ago and five-year averages of 58 Bcf and 66 Bcf, respectively.
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