With a modest Northeast heat wave due to retreat, moderate to cool temperatures prevailing in most other areas and no tropical storm threat to offshore production in sight, prices fell at a large majority of points Wednesday. Flat to a little more than a dime higher quotes, concentrated in the Rockies and Pacific Northwest, brought a return of mixed price movement to the cash market.

The overall losses ranged from 2-3 cents to a little more than 30 cents.

The Florida citygate and all three production-area zones of Florida Gas Transmission softened despite the pipeline issuing an Overage Alert Day (see Transportation Notes). The citygate took the day’s biggest hit of a little more than 30 cents. But although Florida Gas Zone 3 dropped a quarter, it had the Gulf Coast’s second-largest price average behind Transco Station 85.

Most of the rest of the South would fail to get above the mid to high 80s Thursday, and the Midwest is expected to be downright cool with high temperatures mostly in the low to mid 70s. Similarly mild weather would continue to prevail in the West outside the desert Southwest, where peak temperatures are starting to approach 100 degrees again.

The screen, which provided essentially neutral guidance for Wednesday’s cash trading with a 1-cent decline the day before, will have some support for Thursday with the October contract going off the board sporting a 6.2-cent gain. However, sources expect softer cash numbers Thursday.

The October futures rise and Henry Hub’s fall of about a nickel each signaled a convergence attempt, but the Hub still commanded an unusual premium to the screen of about a nickel.

Because of Monday being Oct. 1, gas traded Thursday will be for Friday-through-Sunday flows. Friday’s deals will be for Monday-only flows.

Tropical Storm Karen and Tropical Depression 13 remained nonevents for the gas market, with the former expected to head toward Bermuda and the latter projected to make landfall around late Friday night along Mexico’s Gulf Coast well south of the Texas border.

It was still pretty hot in the Northeast Wednesday, said a regional marketer, but highs will be fading starting Thursday. Boston, which fell short of a predicted Wednesday high in the low 90s by peaking in the upper 80s, was forecast to drop about 10 degrees Thursday. Prices will be “softer for sure” Thursday because “there’s just too much gas around” in storage, he said.

His company wrapped up bidweek business Wednesday, the marketer said, and he thought most other people did too. There’s not much spread opportunity to exploit in the October market, with the Gulf Coast and Northeast citygates trading at levels that barely covered the variable costs of transport. He reported basis at the Algonquin cityate of plus 50-52 cents.

A Texas-based marketer also was looking for softer prices Thursday, saying weather-based demand is dissipating and noting that Thursday’s trading will incorporate the weekend factor, when industrial load drops off drastically. He also agreed that little October trading was left to be done after Wednesday. He was seeing Chicago basis of minus 9-12 cents Wednesday. He expects the Chicago citygate index for October to be around $6.20 (his estimate of a $5.25 September index proved to be right on the mark).

A marketer in the Upper Midwest quoted basis of plus 6 cents for Consumers Power and minus 2 cents for MichCon. That’s what the suppliers offered, she said, and they didn’t give any reasons for the basis disparity between the two Michigan citygates, although she speculated that it might have to do with relative storage levels at the two utilities.

The marketer noted that October futures expired almost exactly an even dollar higher than the September contract. Her company doesn’t like for its clients to pay higher prices, she added, but the advance may have been related to “hurricane hype.” Local weather had been pretty hot at up to 90 degrees through Monday, but had cooled off a lot to the 60s Wednesday afternoon, she said. A moderate warm-up is due again early next week.

©Copyright 2007Intelligence 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.