As sources had correctly predicted, the market took its price cues Tuesday from the previous afternoon’s screen gain instead of continuing general weakness in fundamentals. The result was double-digit increases between about a dime and a little more than 20 cents at most points. The notable contrary position was in the Rockies, where flat to moderately lower numbers prevailed.

Whether the cash rally can be sustained is a dubious prospect. Even though September crude oil futures settled above the psychologically important barrier of $30/bbl Tuesday, the gas screen made a foray into positive territory but couldn’t stay there, ending the day with a 10.1-cent loss. The fading futures support and a lack of substantive air conditioning load outside the tier of states running from the South Atlantic to the desert Southwest makes it unlikely that cash can avoid moving lower Wednesday, a marketer said.

A Florida utility buyer quoted citygates in the mid $3.70s, which was about a dime above Transco Zone 6-New York City and displaced it as the market’s most expensive gas. Noting Florida Gas Transmission’s continuation of an Overage Alert Day notice at 10% imbalance tolerance, the buyer commented, “It’s so arbitrary, so hard to work with FGT and its Overage Alert Days.” OADs often don’t correlate with how heavy market area demand is, he continued, but usually are more a function of operating conditions and production-area supply constraints affecting linepack.

Midcontinent prices went out strongly in the late going, one source reported. “There wasn’t that much demand,” so he concluded that some traders “must have been real short.”

El Paso added another 100 MMcf/d of constraints to an already heavy reduction in North Mainline/San Juan Basin capacity (see Transportation Notes), which tended to back up Rockies supplies and kept a San Juan-Blanco pool uptick smaller than Tuesday’s norm.

A western trader said that for a change he was a net seller at the PG&E citygate because of high gas prices in combination with relatively weak power prices, adding, “There was actually a negative spark spread.” The citygate rise of about 20 cents had little to do with the utility projecting linepack near its minimum target levels over the next few days, the trader said.

Westcoast is in the process of ramping up McMahon Plant operations following completion of the plant’s annual turnaround, and it should be close to 100% in another day or two, a marketer said. That will bring close to 400 MMcf/d back into the Westcoast Station 2 and Sumas markets, boding softer prices at those points. Field operators behind the plant often do maintenance on their own facilities during a turnaround, so they may not necessarily be ready to flow again as soon as the plant is ready to accept their gas, the marketer said.

Liquidity and counterparty creditworthiness show no signs at all of receding as a market issue. “It’s hard for us to sell to anyone now,” a source told NGI Tuesday. “There are some strange dynamics going on to compensate for lack of traders. A lot of us are wondering if companies on the ropes are pulling gas out of storage because they aren’t finding anyone to buy from. They have the markets, but can’t buy the gas, so they will pull the gas now to get enough money to live through these times. It could be a real lean winter for credit-plagued companies.”

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