It’s getting hot again in the Southwest and even chillier in the Midwest and Upper Plains. Those fundamental weather boosts, along with increased interest in storage buying while prices are still relatively low, were enough to generate a rally throughout most of the cash market Monday, despite lingering power outages and/or mild weather dampening demand in the Mid-Atlantic and Northeast.

A few flat to barely higher points were scattered into the mix, but most saw gains ranging from 3-4 cents to nearly 30 cents. A nickel to 20 cents was the most common range of upticks, with most of the smaller ones clustered in the Gulf Coast and many of the larger ones in the West.

“There’s actually some heating demand on our system,” exclaimed a Midwest utility buyer. Highs in the mid 60s during the day and nighttime lows in the 40s are forecast to last through the end of the week, she went on. The fall season seems to be getting off to a cool start, she said, noting that leaves in her neighborhood were starting to turn colors. Acknowledging that she may be proved wrong, the buyer concluded, “I think maybe we’re seeing the bottom of the market.”

Meanwhile, triple-digit high temperatures are spreading again in the East-of-California markets of the desert Southwest, “and that’s taking away some of that Rockies gas that had been flooding California” last week and causing high-linepack OFOs on the PG&E and SoCalGas systems, a marketer said. It’s also pretty warm in much of inland California itself, he added, leading him to perceive “a fair amount of AC [air conditioning] load” in the Golden State.

SoCalGas did not extend an Overnominations Day notice beyond Saturday.

A Northeast utility buyer had no trading to report Monday, which she attributed in part to many people still being without power in the aftermath of Hurricane Isabel’s destructive rampage last week but also to cool weather. Regional prices still realized increases of about a dime or more in several cases due to a surge in storage purchases, she said. Prices have come down enough recently that it’s spurring people to keep buying for storage if they have room left in their accounts, the buyer said. For that reason she expects September will continue to see a string of weekly injections close to 100 Bcf, which may help cap any budding rally, she said.

About a million homes and residents remained without electricity in Virginia, Maryland and the District of Columbia by late Monday.

Calling it an “interesting” price level on the screen in the $4.40s, a Texas-based producer recalled someone telling his staff back in early September that the October futures contract would settle below $4, “and we were going, ‘Yeah, right’ and shaking our heads in private.” Now he’s not so sure that futures might not be headed for $4. However, a contrary indicator was that some end-users “were coming in and locking in October prices based on the screen today [Monday], so maybe they think it [ the market] is oversold,” the producer added.

With Isabel just a bad memory for many, the market finally began its first week in September with no activity on the Atlantic tropical storm front.

Analyst Thomas Driscoll of Lehman Brothers, whose prior storage guess of 100 Bcf last week almost hit the actual mark of 102 Bcf, is forecasting an injection of 95-100 Bcf in this week’s report.

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