Prices spiked by 30-70 cents or so Tuesday even as some traders found it hard to rationalize the market’s strength. They could identify chilly weather in some regions, especially in much of the West, and even noted that much of Texas is hot enough to experience decent air conditioning load.

However, the weather is hardly severe enough currently to send prices surging by an average of about half a dollar, and there’s little else to support such early-week bullishness, one source said. However, he acknowledged that the screen’s gain Tuesday of more than 30 cents likely would keep cash numbers on the rise Wednesday. He also wondered whether traders are getting a little nervous about seeing a little more than 1.5 Bcf/d still offline in the Gulf of Mexico more than a month after the passage of Hurricane Ivan, with prospects for a substantial amount to remain shut in into next year.

With 18 companies reporting, Minerals Management Service said 1,544.08 MMcf/d of Ivan-related shut-ins were still in effect Tuesday. That represented a reduction of about 32 MMcf/d from the day before. Its cumulative total from Sept. 11 through Tuesday reached 92.544 Bcf, or 2.08% of the Gulf’s annual production.

The cold in the West, where snowy conditions were predicted for Wednesday in several mountainous areas, obviously was sufficient to offset high-linepack OFOs by both of California’s giant distribution systems (see Transportation Notes) and Kern River’s report of high linepack in all segments. Although tending to be among the day’s smallest, advances at western points were still substantive, with the Southern California border and PG&E citygate up nearly 40 cents in spite of the OFOs.

Waha and Permian gas, helped by the cooling load of the intrastate Texas market, rose by around 60 cents or more. And although not as hot as Texas, the rest of the South will experience temperatures Wednesday that are well above average for mid-autumn, according to The Weather Channel.

A Northeastern utility fuel buyer said his staff couldn’t understand why prices were so strong. “We were going to buy a little, but prices ran too high, so we took the gas out of storage instead,” he said. Yes, the weather is cooler again, he continued, but it’s not like there’s a blizzard raging in the northern market areas that would cause heating load to jump. Besides, storage is “chock full already,” he said, and the estimates for a 60-70 Bcf injection to be reported Thursday would put the industry solidly over the 3.2 Tcf mark with this week and next week still to go in the refill season. So there’s certainly nothing bullish in that area, he concluded.

“I know the market has been expecting convergence” between cash prices and the screen, but given the current moderately weak fundamentals, it would seem more reasonable for futures to come down rather than cash to be spiking like it did Tuesday, the buyer said. (Even with its jump into the low $6.10s, Henry Hub remained about a dollar below the November futures contract.)

The natural gas screen seems rather unimpressed by the recent retreat of crude oil futures. The gas contract for November rose nearly a dime Monday while crude plunged more than a dollar, and followed that up Tuesday with a 31.7-cent advance that nearly matched the size of crude’s further loss of 38 cents to $53.29/bbl.

Citigroup’s Kyle Cooper lowered his final projection for the storage report to a build between 54 and 64 Bcf after having given an initial estimate in the low to mid 60s Bcf. “Shoulder months are always very difficult from a model perspective,” the analyst explained.

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