All points were up by substantial amounts Tuesday, and many saw major gains approaching or occasionally exceeding a dollar. Then cash traders, in addition to whatever early bidweek business they pursued, spent much of the rest of the day marveling at and/or being mystified by super-spikes throughout Nymex’s energy futures complex, with the natural gas screen skyrocketing by $1.334 to finish at $14.338.

A few points recorded gains of 20-45 cents or so, but most upticks ranged from around half a dollar higher to up a little more than a dollar.

The arrival of cold weather in the populous Northeast and Midwest, and to a lesser degree in the South and parts of the West, provided some fundamental justification for the cash gains. But at least one source professed amazement at the market’s strength, noting that temperatures were due to moderate a bit in the eastern market areas later this week.

Some analysts attributed the $1.30-plus advance at Nymex to the fact that the screen had made repeated attempts recently to make a sustained break below $12.70 resistance but failed each time, thus prompting a move in the opposite direction (see futures story).

“Everybody up here is hearing relatively mild forecasts for the winter, and they just can’t understand” the Nymex spike, a puzzled Midwestern marketer said. People can’t find any news that would be related to $14-plus gas, he continued. Usually November sets the tone for the rest of the storage withdrawal season, he said, “and in our area it’s looking pretty mild” through at least the first week of the month, not to mention “way above normal” for Canada. “Sometimes I feel like telling people I wish gas would go to $20” because that would be beneficial to the alternative energy projects he is involved with, the marketer concluded.

A utility buyer in the Northeast conceded that a spurt of colder weather had arrived, so he bought more daily gas than usual to conserve the company’s storage. But it wasn’t any great amount that would have had any kind of market impact, he said. Nobody on his staff could figure out where the awesome strength was coming from in either futures or cash gas.

What makes the price spikes even harder to explain is that storage is close to full a comfortable week before the traditional end of injection season, he said. Tuesday was the first day of the three-day futures settlement period, “but it’s not the actual settlement,” he noted, so maybe there will be some consolidation by the end of Thursday’s expiration day trading.

Although Tennessee’s 500 Leg in Louisiana still has a lot of shut-in problems from the hurricanes, the pipeline’s 800 Leg seems to have “pretty good flows” again, the buyer went on. He noted that as much got traded on an online service Tuesday on the 800 Leg as there was in Zone 0 in Texas. “That indicates to me that much of Tennessee’s supply picture is healthy again,” he said.

“Other than short-covering,” a Calgary-based producer joined the chorus in saying he couldn’t see any reason for so much Nymex strength. However, the physical market’s rise was easier to explain, he said. Colder weather had arrived in the Northeast in the form of a nor’easter storm, he said, and regional temperatures will still be much lower than normal even with a bit of moderation due later in the week. “We’ve had pretty good weather demand so far” this week in both the Northeast and Midwest, he said. Also, he noted that Tuesday’s cash market got a little extra support from the screen’s 13.2-cent move higher on Monday.

“I’ve got to think there will be a pullback” between now and Thursday’s expiration of November futures because of the seemingly excessive rise Tuesday, the producer continued. He expects cash prices to rise again Wednesday based on weather and prior-day futures support, “but they [cash quotes] won’t match the screen on a one-to-one basis.”

The producer said early November bidweek prices Tuesday “were all over the map because of the way Nymex ran. He reported doing “a ton” of deals at the Chicago citygate over a very wide one-day range from the mid $12.50s up to the $13.40 area. The basis range for Chicago was also unusually large for a single day at minus 80-72 cents, he said.

Hurricane Wilma’s relatively limited impact on Gulf of Mexico (GOM) production still continued to be felt, even as the storm weakened while it sped out into the Atlantic. Minerals Management Service (MMS) said 68 companies reported 5,582.34 MMcf/d in GOM shut-ins to it Tuesday — a little over 110 MMcf/d higher than on Monday. However, the count of evacuated platforms fell by five to 238 while evacuated mobile drilling rigs were unchanged at 24, MMS said. Cumulative deferred gas production since Aug. 26 was up to 348.093 Bcf. The shut-in figures for crude oil were 1,033,621 bbl/d and 68,550,886 bbl cumulatively.

It might be tempting to think that the rise in offshore shut-ins played a role in boosting cash and futures numbers, one source suggested. The trouble with that hypothesis is that the MMS didn’t come out until early afternoon, when cash gas had long since finished trading for Wednesday flows and the Nymex spike had already become well established, he said.

For the second straight time the National Weather Service’s (NWS) forecast for the Oct. 31-Nov. 4 workweek is split on an East-West basis. It looks for above normal temperatures throughout the region west of a line running south from the Minnesota-Wisconsin border before it curves to the southwest through central Oklahoma and West Texas. Below normal readings are expected everywhere east of a near-vertical line from the western edge of New York to the coastal Mississippi-Alabama border. Normal conditions should prevail between those two areas, NWS said.

Hurricane Wilma was becoming extra-tropical as it raced northeastward about 205 miles south-southeast of Halifax, NS as of 5 p.m. EDT Tuesday, the National Hurricane Center said. It did not plan to issue any further Wilma advisories. As anticipated, Tropical Depression Alpha had fizzled out.

Enercast analyst Agbeli Ameko is predicting a storage injection of 65 Bcf to be reported for the week ending Oct. 21.

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