The market was mostly firmer again Tuesday, but the amounts of gain tended to vary widely. Supply and transportation constraints in the Rockies, along with the continuing impact of massive Gulf Coast shut-ins and some instances of heating load in the Upper Plains and West combined with new cooling load in the Midcontinent, were cited as factors in the new upticks. One source suggested that Monday’s screen gain of nearly a dime provided a little extra support for cash Tuesday.

Other than fairly strong advances across nearly all of the Rockies pipes, there was little consistency about cash price movement. Louisiana was the chief source of flat to lower numbers at a few points that were mixed into overall gains ranging from about a nickel to about $1.35.

Although Sabine Pipe Line lifted part of its force majeure to allow the Columbia Gulf and Gulf South connections at Henry Hub (see related story), there was no physical trading again at the Hub again Tuesday. A limited amount of Hub activity on those two pipes is expected Wednesday.

The Midwest illustrated the disparity within geographic regions as gas delivered to Chicago jumped more than a dollar while Michigan citygates could eke out increases of only 10-15 cents or so.

Snow and cold are predicted for Wednesday from Montana and Wyoming through the Dakotas, but that had little to do with higher prices because of the area’s sparse population. Instead, a major supply cut of more than 700 MMcf/d Wednesday in the Rockies (see Transportation Notes) and supply/transport issues on area pipes resulted in gains of 30-70 cents or so in that market and San Juan Basin. However, except for an increase of about 40 cents at the Southern California border, gains were relatively small in California, the Pacific Northwest and Western Canada. Permian Basin/Waha quotes were more dependent on air conditioning load in the intrastate Texas market for their stout increases.

Besides the major outage of the Jonah Gathering Field set for Wednesday, which will mainly affect Opal and Kern River but also weighed on supply availability in the rest of the Rockies, a source noted that Northwest’s Jackson Prairie storage facility is unavailable through Friday due to a bottom hole test, and Questar’s Clay Basin storage field is accepting only injection nominations through Oct. 10 due to maintenance.

Those who deal with Jonah production had ample notice to plan around the cuts Wednesday, a marketer said. It’s safe to assume that with the big curtailment scheduled for only Wednesday, Rockies prices probably will be softening in that day’s trading for Thursday flows, he added. Of course, the same pattern of firmness followed by softness is likely next Tuesday and Wednesday when the same type of Jonah reduction is scheduled for Oct. 12.

The marketer said El Paso’s announcement of the Continental Connector project (see related story) was pretty major for Rockies producers, as it would be significant new outlet for their gas.

Minerals Management Service (MMS) reported a second straight fairly healthy increase in Gulf of Mexico production (see related story). Shut-ins remaining from Hurricanes Katrina and Rita fell to 7,169.50 MMcf/d Tuesday, based on reports from 75 companies, MMS said. That represented a reduction of 325.75 MMcf/d from the day before and followed a shut-in drop of 445.77 MMcf/d over the weekend. However, nearly 72% of the Gulf’s normal daily output of about 10 Bcf/d remained offline, MMS said.

Stan, downgraded to a tropical storm again after going ashore Tuesday morning over Mexico’s southern Gulf Coast, proved to be a nonevent for the energy industry as expected.

Other than hotter temperatures from the eastern Midcontinent through Louisiana and Texas and in the desert Southwest, air conditioning load is fairly light currently. The Northeast and portions of the Midwest ahead of a cold front are rather balmy, and a tropical wave was bringing cooling rains to the eastern Southeast.

A Gulf Coast producer said nobody was trading Henry Hub Tuesday for Wednesday delivery; there might have been some intraday deals after the partial lifting of the force majeure, he added, but he was not aware of any. “Slowly but surely we’re starting to see Gulf Coast supplies” trickle back into the market, the producer continued. Still, the massive impact of the shut-ins is still helping pressure prices higher, he said. Basis spreads have been messy lately. Depending on when the deals were done, at times Monday and Tuesday Transco Station 65 and Transco’s Zone 6-NYC pool in the market area traded as close as a dime apart. Temperatures in the Northeast will stay a little above normal through the weekend before turning a little colder around the middle of next week, he said, but nothing like winter is in sight, though.

Another producer said getting Columbia Gulf service back at Henry Hub was pretty significant, but not that many traders use Gulf South. He thought a lot of people used Columbia Gulf as a Henry Hub surrogate in swaps trading while the Hub force majeure was still fully in effect. He didn’t expect Tuesday’s screen gain of more than 20 cents to be enough to keep cash rising Wednesday. The pace of recovery from Gulf of Mexico shut-ins has started to quicken since last Friday, throwing more supplies into the market, he noted. Besides, weather-related demand is sort of benign right now, he said. But even with offshore volumes rising, damage to the processing plants will continue to hinder getting that gas to market, he added.

One source observed that Hurricane Ivan had seemed to be an aberration last year. Previously Gulf of Mexico production would go down as a hurricane approached and then get restored fairly quickly after the storm’s passage as platforms were repopulated, he said. “Ivan showed that storm outages could have much longer-lasting effects. But I certainly never expected Ivan to be outdone only a year later.”

In the Oct. 10-14 workweek the National Weather Service (NWS) looks for below normal temperatures in the Carolinas, Georgia, Alabama, most of Mississippi, the northern half of Florida and the southern half of Virginia. It also predicted below normal readings for Colorado, New Mexico and the eastern edges of Utah and Arizona. The agency expects above normal temperatures in the Northeast, Midwest and Upper Plains, along with all of California except that state’s eastern and northern edges.

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