Major influences converged to push swing prices lower by about a nickel to just over 20 cents at nearly all points Wednesday: the screen followed up Tuesday afternoon’s decline with even greater expiration-day weakness, and mild late-summer weather virtually everywhere outside the southern edge of the U.S. could no longer be ignored as it had been earlier in the week.

One could claim that the year-on-year storage surplus was another softness factor, but that contention is arguable. Storage hasn’t had much of a role in much of August’s bullishness, and the surplus has diminished greatly since the summer began. If prior expectations centering around a 50 Bcf injection are fulfilled in today’s EIA report, the surplus would be further reduced heading into the traditionally most active part of the Atlantic hurricane season.

Oh, yes, that hurricane season has been so featureless so far that a mere group of thunderstorms moving westward southwest of the Cape Verde Islands off the West Africa coast is arousing some attention, noted an eastern utility buyer. New York City-based Weather 2000 said it believes there are good chances for Tropical Storm Dolly to form during or even possibly before the Labor Day weekend. While that is far from guaranteeing any threat to Gulf of Mexico production, it might make some traders want to think twice about taking a short position over the long weekend.

Weather 2000 also observed that the three named storms this year to date (Arthur, Bertha and Cristobal) “came and went with little fanfare, so many have been lulled into a state of calm. This is in spite of the fact that the 10-year anniversary of Hurricane Andrew just passed (which was obviously the first named storm of 1992), arising after 12 weeks of zero activity to start that season.”

The exceptions to Wednesday’s overall price drops were few — flat to mildly higher numbers in San Juan Basin and at Pacific Northwest/Canadian border points. The Pacific Northwest is under a moderate supply shortfall due to the annual turnaround at Westcoast’s Fort Nelson Gas Plant having commenced Tuesday, while San Juan gas supplies one of the last remaining bastions of severely hot weather (along with southwest Texas), east-of-California markets in the desert Southwest.

The price outlook is extremely bleak Thursday for Rockies pipes. Already driven lower to averages of less than a dollar Wednesday, they will get punished again by a new Northwest line outage (see Daily GPI, Aug. 27 ) scheduled for Friday that will prevent a considerable amount of Rockies gas from flowing northward to Pacific Northwest markets.

Bidweek numbers continued to fall along with the screen, a producer said. “I’d estimate that for September western prices in general, they’ve fallen about 20-25 cents from Monday through today [Wednesday], and it’s primarily due to the screen weakness.” He allowed that there may be some bidweek trading still to be done in the East, but said he thought most if not all business out West had already been completed Wednesday afternoon.

©Copyright 2002 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.