Storm hype or not? It was inevitable that debate on the subjectwould break out again Wednesday after Tropical Storm Irene formedin the northwest Caribbean Sea and cash prices saw this week’suphill climb get even steeper. Virtually all points were rising by15 cents or more, led by New England citygate (Tennessee Zone 6 andAlgonquin) upticks of around a quarter.

On a day when the gas futures screen was providing less supportthan earlier this week (up less than a nickel Wednesday), it was”Good night! It’s Irene” that became the new battle cry for bulls.In its 5 p.m. EDT advisory, the National Weather Service said thestorm is expected to reach western Cuba as a hurricane and was athreat to Florida. At that point it was about 215 milessouth-southwest of Havana and moving north at nearly 9 mph.

An eastern utility buyer dismissed the market’s most recentdisplay of strength, saying, “It’s all storm hype. It’s not thatcold here; I was out in short sleeves today and feelingcomfortable. It [Irene] is just another ‘excuse’ for higher gasprices.”

But a Gulf Coast marketer said it’s not all storm hype “becausethis week’s price rally started long before Irene came along. Autility buyer would say that [see above), but everybody’s got theirown program to pursue.” Agreeing somewhat with the marketer,another source deemed it “pure tightness of supply versus demand”more than any storm push behind the dazzling cash increases.Nuclear power utilization is down nearly 20% since August, and thatis forcing electric generators in many areas to keep their gasunits fired up, he said. Also, heat and humidity remain asignificant factor in the South, he added.

For another trader, it boiled down to this: “Who knowS at thispoint? Whether hyped or not, we like it as producers.”

Sources reported Northeast delivered prices rising as tradingproceeded, but in most other markets the trend was opposite. Aproducer who sold into the Chicago citygate just before 9:30 at$2.93, said less than 20 minutes later he was seeing $2.87 dealsbeing done on an electronic trading service, “and it was alldownhill from there.”

“Some shoulder month,” one Texas trader wryly commented.Maintenance on El Paso is limiting the availability of gas (anestimated 500 MMcf/d) that can be backhauled into the Permian Basinand Waha and eventually transported to the east side of Texas, hesaid. That’s why East Texas points such as Houston Ship Channel andKaty are trading at a premium of a nickel or more to Henry Hub, hesaid.

Intra-Alberta prices continued to climb, said a Calgary traderreporting a C$3.75 deal, but got an extra boost to as high asC$3.80 after NOVA changed its daily imbalance tolerance in theearly afternoon to 0/+20%, citing low linepack.

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