The demise of Debby, softer futures and just not enough summerheat to really matter kept the cash market on a slide Thursday asalmost all points plunged by about 20 cents or more. Predictably,however, the smallest declines were registered by California as ananticipated reopening of one line at Pecos River Station on ElPaso’s southern branch failed to materialize due to a regulatoryfiat.

Debby was unable to hang on to tropical storm status,deteriorating into what the National Weather Service called an”open tropical wave.” Storm watches and warnings were discontinuedthroughout the Caribbean islands. However, NWS did allow thatDebby’s remnants could move into the southeastern Gulf of Mexicoand restrengthen toward the weekend.

The Midwest and Northeast are starting to see slight signs of awarmup, but that was essentially negated as much of the formerlysizzling South began to cool off a tad. But Florida GasTransmission Zone 2 quotes in the mid $4.40s were relatively strongcompared to most other Gulf Coast pipes as market area heatprompted FGT to declare an OFO (see Transportation Notes). FGTdoesn’t have access to storage on its own, noted a marketer, soit’s less able to tolerate negative imbalances than other pipes.

According to one producer, it’s gotten essentially to the pointwhere there was no summer in the Northeast. “We’re nearly intoSeptember, and that means normal high temperatures in the regionwill be only in the upper 70s,” she said.

The Rockies, Southwest basins, Pacific Northwest and westernCanada joined in the overall market’s big downturn. Californiaalone in the West stood almost immune to the softness as border andMalin drops were less than a dime and the PG&E citygate wentdown only about 15 cents. Traders had expected to start puttingmore gas through El Paso’s South Mainline Thursday, but a lateWednesday order by the Office of Pipeline Safety kept El Paso fromreopening Line 1110.

Only a few years ago it was huge news in the gas market when anyone point spiked above $4 just temporarily. Hold on to your hats,because unless something happens to reverse the tide, we could beseeing a Southern California border index for September well above$6.

Border basis was already rising earlier this week, but that wasnothing compared to the ride it took Thursday, several traders toldDaily GPI. Various reports pegged basis at plus 110-120 as morningbusiness began, but an ascent throughout the day was rapid. Onesource said it was up to plus 140 in the early afternoon, but thenleaped again to plus 170 by mid-afternoon.

A marketer reported EnronOnline started Thursday with borderbasis numbers in the 120s, but they went up steadily. In lateafternoon EOL raised its bid-ask spread to 182-191, but then notlong afterward “they took it [border basis] off the systementirely,” he said.

Somewhat surprisingly, El Paso-Permian basis remained fairlysteady around minus 15 despite expectations that it might greatlyweaken due to pipeline constraints going west. A couple of traderscited the drop in the September futures contract, but another saidthe stability was primarily due to a large marketer already buyingheavily in the Permian Basin for September.

A lot of speculation floated around the market about how long itwould take El Paso to restore partial and then full service againon the South Mainline. Although the pipeline said it expected to beable to satisfy the OPS directive sufficiently to be able to openLine 1110 this weekend, Daily GPI sources tended to regard that asunduly optimistic.

There was consensus that a drawn-out outage is highly unlikely.”California needs the gas too much, so there’s no way thepoliticians there are going to stand for depriving their state ofgas supplies in what is often its hottest month of the year,” amarketer commented, summing up the feeling of most.

At least one trader sounded pretty happy about being able tomake money from the situation. “I’m a marketer, man, and I justlove this stuff!” he exclaimed. “I can jump in and out of storagequickly…look for a peak [price], and then find the drop.”

In other basis reports, a trader said Transco’s Zone 6 poolswere at plus 33-34 (NYC) and plus 28 (non-NYC).

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