Prices fell at all points Monday as small gains in cooling load in some areas were outweighed by the fading of a potential tropical storm threat to offshore production and the previous Friday’s screen weakness.

The losses ran from about a nickel to a little less than a quarter; most were in the teens.

As predicted, Alex led off as the first named tropical storm of the 2004 Atlantic hurricane season. Although afforded a chance of reaching hurricane status, its north-northeasterly course while still about 150 miles off the North Carolina coast late Monday afternoon, and a predicted turn more to the Northeast that night were expected to keep Alex out at sea, although the Mid-Atlantic coast could expect a stormy lashing. Another tropical low-pressure system, which had been of more concern to gas traders Friday because of its proximity to the eastern Gulf of Mexico, disappeared from the market radar screen over the weekend. The National Hurricane Center was not even issuing advisories about any remnants Monday.

A Northeast utility buyer was somewhat surprised that Sunday’s heightened terror alert for locations in the New York City and Washington, DC metropolitan areas provided little support for energy cash or futures numbers Monday, although crude oil for September did tack on 2 cents for a record daily settlement of $43.82/bbl after hitting an all-time intraday high of $43.94. Natural gas futures was disconnected from crude again, plunging just shy of 30 cents.

Despite the across-the-board downturn in cash quotes, the utility buyer noted a couple of hints at firmness. “The production area jumped up at first” before going lower, he said. He also sold Transco Zone 6 non-NYC in the low to mid $6.30s at first, then around the mid $6.40s later. That point eventually wound up with one of the day’s smallest drops. Because of the big futures dive, “we should be seeing cash prices go down right off the bat Tuesday,” he said.

A marketer reported that it was definitely getting hotter in Midwest and more power generation load is showing up, but not enough to keep prices from softening.

A producer agreed that there “certainly is a lot more same-day air conditioning load in the Midwest today [Monday] than last week,” but he wasn’t so sure about the next day. “It seems that seems power guys tend to wait more on dispatching” for the real-time daily market than trying to guess at day-ahead needs, he said. That makes it harder for gas suppliers to get a good reading on exactly how much generation load is coming, he went on, because most power dispatchers usually can draw on storage if getting supplies in the intraday gas market proves difficult.

Because of Nymex’s gas plunge, the producer said he expects to see Chicago trading in the low $5.70s Tuesday, with Henry Hub “probably in the same area.”

Some Canadians did have to work on Heritage Day Monday, said a Calgary-based producer who answered his office phone. It was mostly the people “with pure Canadian books” (Aeco, Westcoast Station 2, etc.) that got to take off; “those that work the U.S. markets, like me, got no holiday,” he said.

Lehman Brothers analyst Thomas Driscoll said he expects a storage injection of 85 Bcf to be reported for the week ended July 30.

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