In a now-familiar pattern, prices rebounded at nearly all points Monday by amounts ranging from about a nickel to half a dollar or so. Although cold weather forecasts weren’t able to keep quotes from falling Friday, enough moderate heating load is lingering early this week that along with the return of industrial demand from its usual weekend slump, sellers found no shortage of ready buyers.

Monday’s action extended a three-weekend streak in which big losses on Friday are followed by similarly large gains on Monday. But unlike the huge volatility experienced in the previous two sets of weekend-bracketing trading days, in which ups and downs of around a dollar were fairly common, the market is starting to settle down a bit. That was evidenced last Friday and Monday when movement was capped at around 50 cents.

Following a rather sluggish week for restoring offshore production suspended due to Hurricane Ivan, the pace was picking up again. Minerals Management Service said that with 18 companies reporting to it, Monday’s total of gas shut-ins had dwindled to 1,576.35 MMcf/d, or 123 MMcf/d less than Friday. The count of evacuated facilities remained at nine platforms and one mobile drilling rig, MMS said.

Once again western points were relieved of downward price pressure by the lack of California utility high-linepack OFOs. SoCalGas had systemwide orders in effect Saturday and Sunday, while PG&E implemented a customer-specific OFO Sunday (see Transportation Notes). But all such OFOs had been lifted by Monday.

It was a “pretty wild day” for a Northeast marketer. Prices in general started out 10-15 cents higher, he said, then citygates kept shooting even higher in later deals. “It does look a little colder in New England over the next three days,” so he expects a slightly firmer cash market in his region for a while but without any major spikes.

However, a utility buyer in the Lower Midwest is detecting signs of softness. It was cooler in his area Monday than on Sunday, but temperatures are already due to start warming up again this week, he said, adding, “Even today [Monday] we’re not getting any lower than about 50 degrees,” so system throughput is staying on the light side. It’s still too early to talk November business, the buyer said.

But an East Coast source reported seeing some interest in November deals already surfacing, saying it looks as if the bidweek market will be “pretty well bid.” He thinks that’s largely because sellers want to wrap things earlier because they’re also still pushing November-March term packages. At this point, the source said, it appears that November will be trading about 15 cents above October indexes. There’s no surprise there since the market is entering the first of the “winter” months, he noted.

Saying he expects a storage injection of 45 Bcf to be announced for the week ended Oct. 15, Lehman Brothers analyst Thomas Driscoll added his estimate that “the impact of Hurricane Ivan will reduce natural gas production by a total of about 110 Bcf this refill season. We believe the impact was about 75 bcf in the four-week period ended 10/8/04, we estimate about another 12 Bcf was lost in the week ended 10/15/04, and a remaining 1.5 bcfpd will be lost on average over the remaining two weeks of the refill season.”

Citigroup’s Kyle Cooper provided an initial storage report estimation looking for a build in the low to mid 60s Bcf.

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