Cash numbers were firmer again Wednesday in most cases, but several points that were flat to nearly 35 cents lower continued to keep the market from uniting in consistent price movement. Some prior-day screen support and the persistence of Gulf Coast supply shortfalls were considered the key reasons behind gains ranging from about a nickel to a dollar.

Weather-based fundamentals are basically weak currently, and combined with a 4.1-cent futures decline Wednesday they may be able to reverse the market’s overall upward march Thursday, one source said. A cold front and tropical storm rains will be cooling off most of the South to comfortable levels Thursday, and chilly weather in the Midwest was unlikely to boost regional heating substantially at this point, although snow flurries and/or frost advisories are expected in parts of the Upper Midwest and central Plains, The Weather Channel said.

Temperatures will remain benign in the Northeast, and most of the West’s cold forecasts are for sparsely populated areas.

Although Henry Hub operator Sabine Pipe Line lifted a force majeure for the Hub interconnects of Columbia Gulf and Gulf South Tuesday morning, added NGPL deliveries late that afternoon and said more would be added Thursday (see related story), there were no daily Henry Hub deals reported again Wednesday. The last time the Hub was actively traded was on Thursday, Sept. 23, prior to Sabine’s declaration of a systemwide force majeure. The average Hub price that day was $15.27, up $1.02.

With a major supply outage at the Jonah Gathering Field in Wyoming ending Thursday, Opal and Kern River were among the points recording small losses. Almost certainly due to a 735 MMcf/d cut in Jonah Gas Wednesday, Kern River was reporting low linepack all four segments.

A Houston-based marketer is expecting “maybe a little bit of softening” Thursday. He noted that a cold front will be cutting intrastate Texas power generation load significantly. The marketer reported selling at the Chicago citygate in the mid $13.40s without seeing much price movement either way. He thought the screen was initially positive Wednesday due to worries about the Gulf Coast shut-ins, then turned negative when the Minerals Management Service (MMS) report indicated that the pace of recovery this week was staying fairly strong.

MMS said that based on reports from 75 companies, it counted 6,895 MMcf/d as still offline in the Gulf of Mexico (see related story). That represented a drop of 274.5 MMcf/d from Tuesday.

A Southern utility buyer said the hurricane outages were keeping his schedulers busy. The process of gas getting nominated and then being cut keeps getting repeated frequently, he said, and at times it’s virtually impossible to verify volumes. “Sometimes it takes all four daily nom cycles” to get it right, the buyer said. The cuts are mostly small but there’s a lot of them, he added. People can’t really buy daily gas in either of Trunkline’s Louisiana zones and be sure of its delivery, he said.

The buyer suggested that the cash market might be staying strong “until it gets some more certainty” about the Gulf supply situation.

A marketer in the Upper Midwest said daytime temperatures were still in the 80s Wednesday but would turn colder starting Thursday. It wouldn’t be cold enough to get here to turn her furnace on, she said, “but it may for some people.” Her company continues to dislike current high prices, so it didn’t buy any spot gas Wednesday, she said.

Tropical Storm Tammy formed off Florida’s Atlantic coast Wednesday morning (and in the process claimed the third-from-last moniker on the official 2005 naming list; only Vince and Wilma are left before Greek alphabet letters Alpha, Beta, Gamma, etc. start getting used if necessary). Tammy was close to coming ashore near the Florida-Georgia state line that afternoon and was projected to weaken to a depression Wednesday night as it continued northwestward into Georgia. That would have essentially no impact to Gulf of Mexico production, but the rains accompanying Tammy would tend to lower power generation load in the Southeast.

Enercast’s Agbeli Ameko predicted an injection of 25 Bcf for Thursday’s storage report. Ameko noted that Enercast had just released its “September Outlook” report “with analysis showing total projected lost natural gas production of 232 Bcf as a result of Hurricane Katrina. Models are updating now to account for Rita’s impact. Early output shows extremely tight supply by late March, putting the market below levels experienced in 2001.”

Meanwhile, Ron Denhardt of Strategic Energy & Economic Research said his projection of injections for the week ending Sept. 30 is 37 Bcf. “There is still little indication about how fast production will return and how much demand destruction will take place because of high prices,” Denhardt said. “…[E]stimated academic price elasticities and fuel switching capabilities suggest that prices are currently high enough to assure enough gas in storage to meet a 5% colder than normal winter. However, because of the risk of an additional hurricane activity, uncertainty about how fast production will return, and low confidence in price elasticities, our prices through the heating season do not differ significantly from the forward market.”

©Copyright 2005Intelligence Press Inc. All rights reserved. The preceding news reportmay not be republished or redistributed, in whole or in part, in anyform, without prior written consent of Intelligence Press, Inc.