The pattern got broken. For a change cash prices did not follow the previous afternoon’s screen higher, which had been the norm in previous weeks whenever there was a significant change in futures after the morning’s cash deals were complete. Instead, most points were flat to about a dime lower Tuesday.

Most of the softness was quite mild with declines of a nickel or less. The major exception was a plunge of more than 30 cents at San Juan-Bondad. On the plus side, Columbia-Appalachia (TCO) and Florida citygates broke their tie for most expensive gas as Florida prices fell a nickel, while TCO gained about a dime. A Florida utility buyer, reporting that citygates had fallen from early levels in the $4.00s to around $3.90 or less late, noted that Florida Gas Transmission had eased the imbalance tolerance for an Overage Alert Day notice from 5% to 10%.

Rockies/Pacific Northwest/San Juan-Blanco points also saw upticks ranging from a couple of cents to about 20 cents. They had been expected to rebound from Monday’s losses due to a Northwest Pipeline outage being set for Tuesday only.

“I guess the market has started to pay some attention to weather fundamentals again,” one source remarked, referring to recent price firmness that seemed in defiance of generally mild weather outside much of the southern tier of states.

A Gulf Coast marketer found it “surprising to see Transco Station 65, which has been above Henry Hub all month, now at a discount of 3-4 cents.” All the pipes with Northeast market areas seemed weak, he added, which was reflected in many of Tuesday’s larger drops approaching a dime occurring at Northeast citygates. Tennessee had been trading upward recently due to maintenance issues, but now those are gone, the marketer said. He thought it “pretty reasonable” to expect Tuesday’s screen loss of a little more than 13 cents, combined with moderate softness in Nymex’s crude oil and heating oil contracts, to keep cash on a downward track Wednesday.

An eastern utility buyer and a marketer agreed that they don’t expect anybody will wait until Friday to finish up the September bidweek. “Not with practically everybody taking off early for the Labor Day weekend,” said the buyer.

Another marketer concurred, saying, “There was steady baseload trading though this morning. By the end of Tuesday most people will be done. Traders are habitually getting done earlier. There is moderate trading for a shoulder month.”

A Canadian producer found good convergence between swing and September prices at the Chicago citygate via Alliance, quoting both in the high $3.30s. It didn’t work quite that well for a Sumas trader, however. Her next-day quotes in the low to mid $2.30s were exceeded by about 20 cents in September deals.

September basis got weaker Tuesday, especially in the Gulf Coast, one trader said. “Maybe crude was holding the gas market up for a while, and now its support is starting to disappear.” He quoted Transco Station 65 basis at plus 3.5-5 cents, with the 5 cents prevailing in the morning. Similarly, Tennessee’s 500 Leg traded at minus 1 cent Tuesday, down from flat on Monday, he said.

Cash has seen quite a run-up over the last couple of weeks “because there is a lot of fear in the market,” according to a marketer’s analysis. “Production is low, lower than it has been for awhile. Traders fear there will be a deliverability issue this winter if producers don’t start tapping more wells soon. It takes a good two to three months to ramp up for the cold season. If Jack Frost shows up a little early and invites all his chill weather friends over, we will be pulling extra gas out of storage to cover for the lack of production. You pack gas all year so you don’t have to worry about being caught short.

“Personally I think the swing market is overpriced, as there is no weather anywhere. New York temps are about 70-80 degrees. There is some scattering of heat across the nation but nothing significant, and mostly it is below average for this time of year. A lot of the run-up was just momentum. Prices can move like a runaway freight train. I guess we were lucky there wasn’t a derailment.”

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