Cash prices were close to evenly divided between gains and losses Monday, with falling points slightly outnumbering the rising ones. On the first official day of fall the market was seeing mostly seasonal weather; that is, it was hot enough in the desert Southwest for Phoenix to have a triple-digit high in the forecast for Tuesday but only warm in the South (highs throughout the 80s) and mild to cool almost everywhere else. Although sporadic and modest heating load has shown up in the last week or so in areas on either side of the Canadian border, it is not yet a significant market factor.

The spot market had some support from the return of industrial load from weekend hiatus, but had negative guidance from Friday’s 9-cent fall by October futures. However, the contract — which begins its three-day countdown to expiration Wednesday — will be supportive for cash numbers Tuesday after getting swept up by a skyrocketing petroleum product futures market to post an increase of 13.7 cents Monday (see related story).

The market’s areas of softness and firmness broke down largely along geographic lines, although there were exceptions to the general trends in each area. The Gulf Coast, Midwest and Northeast/Appalachia tended to see most of the quotes that were flat to about 45 cents lower, while the numbers that rose from a couple of pennies to about 65 cents were concentrated in the Midcontinent and Midwest.

CenterPoint-East, which has been unusually weak recently, recorded Monday’s biggest increase by far. A producer said he bought gas into CenterPoint-East for the weekend for as little as $2.05, but Monday’s lowest quote was $3.20.

Florida Gas Transmission ended an Overage Alert Day during the weekend but put it back into place Monday, citing warmer weather in its Florida market area. That didn’t keep Florida Gas Zone 3 and the Florida citygate from dropping about 15 cents and 45 cents, respectively.

The process of restoring shut-in Gulf of Mexico (GOM) production continued over the weekend, with operators bringing the off-line volume down to 4,849 MMcf/d Monday from 5,576 MMcf/d Friday, according to reports from 65 companies to Minerals Management Service (MMS). MMS also said oil shut-ins in federal offshore waters had dwindled to 995,684 b/d. Its count of evacuated platforms was down to 225, but the evacuated mobile drilling rigs tally actually rose by one over the weekend to seven (see related story).

Barclays Capital analysts, saying cumulative losses from federal and state waters are now approaching 150 Bcf, added that the slow progress in GOM recovery is largely a result of delays in restoring onshore infrastructure. Nine natural gas processing plants are still off-line, which account for 5.23 Bcf/d of operating capacity, they noted. “Persistent flooding on roads and facilities, power outages and lack of personnel point to a rather slow pace of improvements over the next few days,” the analysts said in a Monday advisory.

The industry was eyeing, with no apprehension, a broad low-pressure area centered over the eastern tip of Hispaniola (Haiti and Dominican Republic) Monday afternoon. The National Hurricane Center continued to rate the system as having medium chances (20-50%) of development, but allowed that it could become a tropical depression as it moves to the north-northwest away from Hispaniola over the next day or two. Most models projected that the storm would stay out in the Atlantic or possibly make landfall in the Northeast U.S.

With Capitol Hill getting ready to debate a $700 billion bailout program for Wall Street (see related story), counterparty credit issues are a hot issue for “just about everybody,” a Midcontinent producer said. His company is shying away from selling to gas bank trading companies, he said, but is having trouble finding replacement customers. “They [the banks] used to provide more liquidity to the market, but that’s disappearing,” he added. Noting the breathtaking spike by crude oil futures Monday, the producer lamented, “Nothing is making any sense these days.”

He said he thought some of his fellow producers were helping to keep a floor under the cash market by voluntarily shutting in gas.

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