Apparently it takes more than light weather-based demand and heavy storage inventory levels to faze the bullishness of cash traders lately. Even with prior-day futures support dropping to 2.3 cents Tuesday, the physical market managed to extend upticks at nearly all points Wednesday. Granted, Wednesday’s advance wasn’t nearly as strong as the one a day earlier, but the fact that it was achieved at all was somewhat impressive.

Flat quotes at a few points and a modest retreat of about C5 cents by Westcoast Station 2 were the exceptions to overall gains ranging from 2-3 cents to about 15 cents. Despite moderate forecasts, the Rockies tended to have most of the increases in double digits.

Cash traders will return to having major screen backing Thursday after October futures spiked by a whopping 44 cents in what was mostly attributed to continued short-covering at Nymex (see related story).

The cessation of an Overage Alert Day by Florida Gas Transmission left almost no pipeline restrictions (other than storage) of any significance in place.

The impending full-storage situation in the South may not be quite as serious as previously expected. Southern Natural Gas, which had said a little more than a week earlier that its two storage facilities were up to 97% full as of Sept. 3 (see Daily GPI, Sept. 10), now reports that levels have receded a bit. As of Sept. 10 volumes stood at 57.2 Bcf, or 95% of total working capacity of 60.0 Bcf, Southern said. That compares with 47.6 Bcf (79%) on Sept. 11, 2008 and 51.5 Bcf (86%) on Sept. 13, 2007.

Neither the remnants of Hurricane Fred in the mid-Atlantic nor a low-pressure area closer to West Africa were expected to have much chance of development.

Except for highs returning to around 90 or slightly greater in some parts of Texas such as the Houston area and interior California, the general weather outlook was due to remain largely unchanged Thursday: hot in the desert Southwest and moderate to cool almost everywhere else. Not all of Texas will participate in the warming trend, either, as Weather Central predicted that the Dallas-Fort Worth Metroplex is unlikely to get above the low 80s again.

An unusually mild summer will continue for most of the South, with peak thermometer levels limited to the mid 80s or less for most of the region. Cool forecasts remain in effect in Canada and the northern half of the United States, but they aren’t cold enough to generate anything substantive in the way of heating load yet.

The National Weather Service’s (NWS) six- to 10-day forecast posted Tuesday afternoon for the Sept. 21-25 workweek looks for below-normal temperatures in most of the area east of a line running northeastward from southeastern New Mexico through eastern Nebraska before turning to the north along the eastern edges of the Dakotas. The exceptions in that area are normal conditions in the lower Northeast and above-normal readings in New England and northeastern New York. NWS also predicts above-normal temperatures everywhere east of a line from eastern Montana through western Colorado that then curves to the southwest through central Arizona. The greatest deviations above normal will occur in Northern California and much of the Pacific Northwest, NWS said.

SunTrust Robinson Humphrey analyst Cameron Horwitz expects an 83 Bcf storage injection to be reported for the week ending Sept. 11. He said the higher sequential build is largely attributable to a week-on-week decline of roughly 1.5 Bcf/d in industrial demand associated with the Labor Day holiday. Tim Evans of Citi Futures Perspective anticipates a slightly higher injection of 86 Bcf for the week ending Sept. 11, and looking further ahead he projects additions of 90 Bcf and 72 Bcf for the weeks ending Sept. 18 and Sept. 25, respectively.

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