With the exception of drops at several western points, a majority of the cash market extended Monday’s rally into Tuesday. Some heating load in northern market areas, a modicum of cooling demand from the South through Southern California and the previous day’s 15.3-cent rebound by November futures supported prices at most points.

Tuesday’s gains ranged from 2-3 cents to about 50 cents. NOVA Inventory Transfer recorded a small loss of less than C5 cents; otherwise, the western declines were pretty large at about 40 cents to nearly $1.15.

Cash quotes will have continued prior-day screen support Wednesday, but not much. The November gas contract eked out an increase of 3.9 cents Tuesday amid weakness in Nymex’s petroleum product offerings as what had appeared to be continuing stock market strength that morning fizzled and the Dow Jones Industrial Average ended the day with a loss (see related story).

The pace of restoring Gulf of Mexico (GOM) shut-ins related to hurricanes Gustav and Ike remains at a crawl. Minerals Management Service (MMS) began its twice-a-week (Tuesdays and Thursdays) statistical updates by saying 62 companies had reported 2,737 MMcf/d in remaining gas outages Tuesday — a reduction of only 90 MMcf/d from last Friday’s volume. Oil shut-ins fell by 56,715 b/d from Friday to 506,201 b/d Tuesday, while the count of evacuated platforms stayed at 81, MMS said.

Although the delays in getting back to full GOM output could be construed as moderately bullish, it has been noted often that robust storage injections and generally weaker prices in the slightly more than a month since Ike plowed through the offshore production area adequately show that the market is not really missing the off-line supplies.

Tropical Depression Nana disappeared from the National Hurricane Center’s (NHC) radar screen, so to speak, in the central Atlantic Tuesday. Tropical Depression 15 took Nana’s place by developing into Tropical Storm Omar in the eastern Caribbean Sea and was rapidly intensifying to near-hurricane strength Tuesday, NHC said. However, its projected tracking through the northern Leeward Island would take it into the central Atlantic well east of Bermuda this weekend.

Tropical Depression 16 (TD16) had looked like a potential GOM threat Monday while it was still a low-pressure area moving northward off eastern Nicaragua. But NHC expected TD16 to move eastward along the northern shore of Honduras before moving inland into Guatemala.

Although SoCalGas failed to renew a high-linepack OFO (see Transportation Notes), the Southern California market and El Paso in the San Juan and Permian basins saw big drops as excess supply issues failed to go away. SoCalGas has lost injection capacity at its Aliso Canyon storage field because of nearby wildfires, and El Paso continued to warn shippers of potential actions due to high linepack.

The Midcontinent was strong near the end of trading, said a producer in the region, but he also saw a little late weakness in some other places. For that reason his call for Wednesday’s cash market was little change or a bit softer. Somebody must have gotten caught short at NGPL-Midcontinent, he said, as the top quotes there occurred in essentially last-minute deals.

CenterPoint numbers remain weak due to an ongoing O Line outage trapping gas at quite a few shut-in receipt points, the producer noted. He added that’s it’s been chilly in the Midcontinent lately, which may have helped OGT realized Tuesday’s top gain, but it’s still not cold enough for any substantive heating load.

The National Weather Service predicts above-normal temperatures during the Oct. 20-24 workweek from Southern California and the southern end of Nevada through central Alabama to the south, through the western edge of Ohio to the northeast (encompassing all of the Midwest) and through eastern Montana to the northwest. Its six- to 10-day forecast calls for below-normal readings only in New England along with eastern New York and the northeastern corner of New Jersey.

Citi Futures Perspective analyst Tim Evans projects storage additions of 80 Bcf, 85 Bcf and 55 Bcf for the weeks ending Oct. 10, Oct. 17 and Oct. 24, respectively.

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