The cash market plunged Thursday in response to the latest reports of increased storage (both new and revised) and the screen’s subsequent dive Wednesday afternoon. Weather fundamentals remain generally lightweight and the latest Atlantic tropical storm was fizzling out almost as fast as it had developed.

A Gulf Coast producer proved accurate with his Wednesday afternoon prediction that yesterday’s cash softness would correspond closely with the futures decline of slightly more than 30 cents following AGA’s report. Except for most Rockies/San Juan points and a couple of Northeast citygates, nearly all of Thursday’s price drops were less than a nickel up or down from the preceding screen slide.

Following the big downturn just about everyone contacted by NGI seemed resigned to a lengthy period of price weakness. “The market is very tender right now,” a marketer commented, especially with the latest six-to-10-day forecast indicating above normal temperatures only in the Upper Plains area from Minnesota through Wyoming and Idaho, a region that is mostly very sparsely populated.

A producer said, “Now that we’re substantially below $3 at Nymex, prices look to be soft all the way through bidweek. I’m hard-pressed to see us getting back above $3 again anytime in near future, although there could be a small rally or two along the way.”

A cooling trend in the Northeast tended to generate larger price drops at regional citygates than in the general market. Meanwhile, a similar trend toward greater softness in the Rockies/San Juan market was attributable to both the cancellation of an El Paso low-linepack OFO and traders’ anticipation that a sizeable supply constraint at the Opal Plant was nearing an end. A late-afternoon bulletin board posting by Northwest said Williams Field Services expected Opal to become fully operational again around 6 p.m. MDT Thursday. “Increases in scheduled quantities for Gas Day 23 in the ID2 [Intraday 2] cycle will be based on established gas flows,” Northwest said. “WFS will continue calculating cuts until gas flows have been fully restored.”

For one western electric utility, the key to much lower gas numbers was a similar plunge in power prices. “Between the transportation costs of gas and the plummeting power costs, there’s no point in buying gas to burn,” he said.

Many forecasters were amazed at how quickly Dean developed from a tropical wave into a tropical storm. Nearly as amazing was the rapidity of its regression to a tropical depression; in fact, Dean was nearing tropical wave status again Thursday, according to the National Weather Service. All storm warnings and watches were discontinued in the eastern Caribbean, and NWS said it would post no more Dean advisories unless the system re-strengthens. At midday Thursday what remained of Dean was about 85 miles northeast of Grand Turk island southeast of the Bahamas.

However, several tropical waves have developed in the Atlantic between West Africa and the Windward Islands. The one that was about 300 miles southeast of the Cape Verde Islands was considered most likely to develop into a storm, a forecasting service said.

One trader said it’s possible that three to four weeks from now, everyone will have forgotten will have forgotten the AGA storage report furor, or at least put it behind them. But the furor hadn’t abated much as of Thursday. A marketer may have reflected industry consensus in saying that if AGA had made its injection correction on Thursday or Friday of last week, damage control would have been much better. He estimated AGA-related trading losses at about $400 million when prices were soaring last week and maybe $100 million when they were taking a dive Wednesday. “It hurt a lot of people, although not me. The ones screaming the loudest were the ones who lost a lot of money. The lesson to be learned from this by AGA is: Just be consistent.”

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