As if finally recognizing that they’ve been coasting higher recently in the face of fairly weak seasonal demand, prices yielded to bearish fundamentals Tuesday in posting declines ranging from 1-2 cents at a couple of western points to 15 cents or so. Most losses were around a dime. Transwestern-Permian was an aberration with a small gain.

Generally moderate temperatures have dominated much of the market for a week but didn’t seem to faze prices until Tuesday, one source commented. In addition to lack of weather support, he pointed out the absence of any near-term hurricane risks to production and widespread anticipation of a large injection volume in this week’s storage report as reasons to expect moderate softness to continue.

A marketer who focuses on the New England market reported he actually was getting a few calls for heating load early this week. “Summer ended in a hurry,” he said, but added that temperatures were still not cold enough to have a significant impact on prices. “Otherwise it’s pretty quiet for us,” he said. “[Hurricane] Fabian’s out of the picture, so now it’s time to keep an eye on [Hurricane] Isabel.”

The marketer noted that the more northwesterly track that Isabel was taking Tuesday tended to lessen the Gulf of Mexico risk and put the storm on an East Coast heading. That’s assuming that Isabel even reaches North America, he said; it might be like Fabian and come no closer to the continent than Bermuda.

As expected, Isabel had reached Category 4 hurricane status by Tuesday. At 5 p.m. AST its center was about 930 miles east-northeast of the northern Leeward Islands and was moving toward the west-northwest at nearly 13 mph. That general motion was expected to continue for 12-24 hours with a gradual turn toward the west likely afterwards, the National Hurricane Center said. The “disorganized” Tropical Depression 14 continued to tag along well behind Isabel, passing just to the southwest of the Cape Verde Islands off West Africa Tuesday afternoon.

The Permian Basin/Waha market is “so dead this week,” commented a marketer. There’s not much intrastate Texas demand now that relatively mild late-summer weather has set in, she said. Houston-area highs were predicted to remain in the vicinity of 90 degrees through at least Saturday, and the Dallas-Fort Worth forecast was for the low 90s Wednesday.

It appeared briefly that a power outage Monday afternoon at the Opal Plant in Wyoming might cause a Rockies supply curtailment of 200-250 MMcf/d, but plant operator Williams Field Services said the outage was short and cuts were minimal (see Transportation Notes). A marketer said he didn’t know what Opal’s status was Tuesday, but he “didn’t see anything going on crazy in prices there, so it [outage] must not be having much impact.” He also reported hearing that “a little” maintenance was scheduled Thursday in Jonah Field behind Opal, but was unaware of any supply disruptions that might ensue.

A couple of developments hinted at downward pressure on western prices: (1) PG&E’s projected linepack was threatening to rise above the utility’s maximum target level Wednesday; and (2) Northwest reported that for all practical purposes, its Jackson Prairie storage facility is full. As of Sunday total current inventory stood at 20,397,307 dekatherms out of total capacity of 20,413,704 dekatherms, the pipeline said.

For the Sept. 15-19 period, the National Weather Service predicts above normal temperatures in two areas: New England and most of New York; and from the western tip of Texas through most of New Mexico and Arizona and the southern half of California. Below normal readings are expected in the South from Virginia through East Texas and in Washington state and the northern part of Idaho.

Analyst Thomas Driscoll of Lehman Brothers forecasts an injection of 85 Bcf for the week ended Sept. 5. If the 85 Bcf volume is correct, it would leave storage inventory levels at 2,474 Bcf, 381 Bcf lower than a year ago and 144 Bcf below the five-year average.

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