As a marketer had correctly predicted, the cash market was unable to sustain Tuesday’s brief burst of firmness and was down at nearly all points Wednesday. The previous day’s 4.1-cent drop by September futures played a minor bearish role, of course, but it was primarily the subpar late-summer cooling load and continuing warnings about storage facilities soon being unable to accommodate further injections in many locations (see related story) that drove most quotes downward.

A few scattered flat to nearly a dime higher points were left out of overall losses ranging from 2-3 cents to about a quarter. A modest majority of declines were in single digits; most of the largest ones were in the Northeast, where a significant cooldown from previously slightly above-normal temperatures will be starting Thursday. The fourth named tropical storm of the season is expected to extinguish most of the region’s remaining cooling demand by the weekend.

The strongest market area was Western Canada, where a bit of heating load is developing (Calgary was forecast to sink as low as the upper 40s Thursday) and formerly high linepack in some cases has receded to normal levels.

Although it stayed in the red for most of the day, the prompt-month futures contract rallied late to post an increase of 2.8 cents on its penultimate day of trading (see related story).

The National Hurricane Center (NHC) made it official around midday Wednesday. The 2009 Atlantic hurricane season now has its fourth named storm in the form of Tropical Storm Danny (the Pacific season is way ahead, already being up to Ignacio). Although Danny was expected to come closer to the East Coast than Hurricane Bill did, it still was expected to emulate Bill in staying out to sea until possibly reaching Canada’s Maritimes provinces. The most likely gas market effect will be a reduction in cooling demand along the coast from around the Carolinas through the Mid-Atlantic into the Northeast.

No other Atlantic tropical activity of any significance was on the radar Wednesday, according to NHC.

Besides the Northeast, substantive cooling trends are predicted for Thursday in much of the Midcontinent and Midwest. Although Oklahoma peaks will be dropping into the mid to upper 80s, highs will continue to stretch from the low 90s through the 110 area from Texas through the desert Southwest into interior California. But only a modicum of power generation load for air conditioning exists outside that area.

Florida forecasts in the 90s prompted Florida Gas Transmission to issue an Overage Alert Day (see Transportation Notes), which lifted Florida citygates slightly but failed to avert production-area losses of around a dime into Florida Gas. The rest of the South east of Texas will once again be challenged to get above the 90-degree area Thursday.

Danny is certainly another tropical nonevent for the gas market, a Texas-based marketer said. But, he added, although the industry has gotten through the first 60% of the hurricane season with no production threats, that could change in September and October. He just hoped that no more Katrinas, Ritas or Ikes were upcoming.

The marketer said fixed-price September baseload deliveries at the Nicor and NIPSCO Chicago citygates traded in the $2.80 area Wednesday, while physical Chicago basis was minus 6 cents. It’s looking pretty certain that first-of-month indexes will be lower again, he said. He expects nearly all September baseload business to be finished by end of Thursday, with just a little taking care of loose ends Friday and Monday.

The marketer said he is not seeing any “panic” about storage yet, just some concern that there’s not much space left.

In its six- to 10-day forecast for the Aug. 31-Sept. 4 workweek, the National Weather Service (NWS) looks for above-normal temperatures in the southern end of Florida and everywhere west of a line running southward from central Montana through central Arizona. It predicts below-normal readings throughout nearly all of the East (excluding the Florida peninsula south of the Panhandle), extending through most of Minnesota and eastern South Dakota to the north and through southeast Texas to the south. The below-normal will extend farther westward in the central U.S. to eastern Colorado and the northeast corner of New Mexico, NWS said.

SunTrust Robinson Humphrey analyst Cameron Horwitz anticipates a report of a 49 Bcf storage injection for the week ending Aug. 21. The lower sequential estimate, he said, “is largely a result of a slight increase in gas-fired power generation demand amid a 7% w/w [week-on-week] increase in cooling degree days.”

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