Tuesday deliveries of physical natural gas overall on average rose 11 cents in Monday’s trading. A strong screen as well as warm temperatures kept California points at double digit gains and in the Northeast capacity constraints kept New England locations solidly in the black. At the close of futures trading October had added 6.1 cents to $3.738 and November was up by 5.9 cents to $3.814. October crude oil fell $1.62 to $106.59/bbl.

California gas buyers noted that power prices were still at elevated levels helping to keep next-day gas prices firm. “SP-15 is still a little on the high side,” said a southern California gas buyer for a power generation firm.

IntercontinentalExchange reported that peak power for delivery Tuesday at SP-15 settled at $44.16, down $4.72/MWh. Peak power into NP-15 finished trading at $42.18, lower by $3.76/MWh.

The California Independent System Operator reported that loads were expected to peak at a hefty 39,414 MW Monday.

Although greater Los Angeles temperatures are expected to be normal, points east were showing well above normal temperatures. Forecasts were expected to drop off as the week progressed. AccuWeather.com predicted that the high in Riverside, CA Monday of 99 would ease to 90 by Tuesday and 86 Wednesday. The seasonal high in Riverside is 92. Pasadena, CA’s high of 94 Monday was anticipated to drop to 83 Tuesday and 82 Wednesday. The normal mid-September high for Pasadena is 90. Burbank, CA’s high of 95 Monday was predicted to ease to 87 Tuesday and Wednesday, right at the seasonal norm.

Next-day deliveries at Malin rose by 12 cents to $3.62 and gas at PG&E Citygates added six cents to $4.03. At the SoCal Citygates next-day deliveries rose by 8 cents to $3.88 and at the SoCal Border Tuesday packages gained 13 cents to $3.77. On El Paso S Mainline Tuesday packages added nine cents to $3.84.

Colorado Interstate Gas Co. LLC declared a force majeure due to the recent Colorado flooding (see related story). It announced that CIG Line 59A leading to the Young Gas Storage facility in Morgan, County had become exposed. It said that line 252A leading to the Tritown delivery point had also become exposed, and the lines have been taken out of service for safety precautions while inspections are conducted. The force majeure will remain in effect until further notice.

A Denver producer said they were not affected since most of the damage appeared to have been in Colorado and their production was near Baggs, WY. “Anything in Weld County in northeast Colorado is likely to be affected,” he said (see related story).

Rocky Mountain points were firm. CIG Mainline added 8 cents to $3.48 and at Cheyenne next-day gas added 12 cents to $3.57. Northwest Pipeline WY rose 12 cents as well to $3.45 and CIG DJ Basin was quoted at $3.50, up 9 cents. At Opal next-day gas changed hands at $3.56, 12 cents higher.

According to Mike DeVooght of DEVO Capital Management, the market is not likely to break much beyond $4, if it moves higher at all. Nonetheless, from a risk management perspective, he advises clients to protect themselves against weaker prices. “Natural gas settled slightly higher on the week. After trading in a tight range for the past week, a friendly gas storage number was enough to push the market higher on the week.

“Fundamentally, it is difficult to make a bullish case for natural gas. It seems that the greater likelihood is that we continue to trade in the low $3 to the low $4 range for the foreseeable future. On a trading basis we will hold current short positions,” he said.

Trading accounts should continue to hold a short October position initially established when June was trading at $4.35, and risk 25 cents on the trade. End-users should stand aside, and physical market longs should continue to hold a short October position from $3.75 to 3.95. They should also continue to hold a short November-March strip from $4.50 to 4.60, DeVooght said.

Addison Armstrong of Tradition Energy sees the market currently walking a narrow “$3.50” tightrope. “Gas prices have now spent more than two weeks trading above $3.50 as traders balance late-summer heat and increased cooling demands across the Midwest and the most active stretch of the hurricane season against the fast-approaching start of shoulder season and the near-record production levels of gas that overhang the market,” he said.

Energy Metro Desk in its Early Bird survey of this week’s storage report found an average injection of 57 Bcf from a sample of 16 traders and market pundits. The range on the survey was 43-64 Bcf.

Tom Saal, vice president at INTL FC Stone in Miami, is looking for the October futures to test last week’s Market Profile value area at $3.622 to $3.534 before moving on and testing $3.419 to $3.333. “Buyers be ready,” he said.

Tropical Depression Ingrid in the southernmost Gulf of Mexico has moved onshore Mexico and is expected to disintegrate. In its 2 p.m. EDT Monday report the National Hurricane Center also said Tropical Storm Humberto was moving to the west-northwest over the east-central Atlantic at 15 mph with winds of 45 mph.