A general lack of weather load outside some parts of the West and Upper Plains and the previous day’s screen drop resulted in mixed pricing Tuesday in which losses slightly outweighed gains. There was little rhyme or reason in the distribution of movement, as various points within specific market areas went both up and down.

Many points were less than a nickel up or down from flat, but advances went as high as nearly 30 cents while other points fell as much as about 15 cents.

But the topic of discussion most on sources’ minds was the awesome strength of energy futures that left the natural gas screen at heights not seen since March 2003. The November natural gas contract skyrocketed a little more than half a dollar to $8.402, while crude oil for December delivery matched last Friday’s all-time high daily settlement of $55.17/bbl. Nymex’s other oil-related products also spiked.

“A lot of people that we buy gas for were calling today [Tuesday] because they were so upset about the Nymex spike,” said a Midwest marketer. It’s very disturbing to people trying to prepare their budgets when gas futures prices shoot up 7% in about an hour, he said, referring to the rapidity of the screen’s climb. Some of his customers “are pretty big,” and their gas bills effectively just went up $21,000 a month or so, he added.

The marketer sees trouble brewing for the gas industry as high prices persist. People are looking for any energy alternatives possible, he said, because natural gas and energy in general “have gotten to be totally undependable in the last three years for utilities and end-users.” The current energy market is causing financial hardships for a lot of people, he continued, saying, “We’ve never gone into a winter in this kind of condition.”

The Nymex run-ups definitely helped push November prices higher, he said. “I would estimate $8.50 for Michigan citygates Wednesday, but it could be $9. Who cares in this situation?”

One might expect a Gulf Coast producer to think differently from the marketer about Tuesday’s futures action, but he also was puzzled and rather unapproving. “It’s starting to get extremely stupid in energy markets,” he said. “There’s no news out there that I’ve heard to explain the futures spikes. I have to assume that gas went along with rising oil.”

Traders certainly are not expecting a very bullish storage report, the producer said. Technically the market is in uncharted territory, he went on. Noting that January futures went past $10 in Access trading, he said he wouldn’t be surprised to see November hit $9 Wednesday. The producer estimated that November Gulf Coast prices only went up 3-5 cents Tuesday, but said they should be going a lot higher Wednesday.

“There’s a food maker that I sell gas to,” he continued. “When I give him my prices he says, ‘Oh my God, you guys are making a killing…You guys are fat and happy.’ I try to persuade him that it’s not us controlling the prices and that we’re really not pleased ourselves” with the way energy markets are going.

Lehman Brothers analyst Thomas Driscoll expects a storage injection of 35 Bcf to be reported for the week ended Oct. 22, while Citigroup’s Kyle Cooper is calling for a build of 29-39 Bcf.

Offshore shut-ins fell by the meager amount of 4 MMcf/d to 1,514.08 MMcf/d Tuesday, according to the Minerals Management Service.

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