Prices continued to rise at nearly all points Wednesday, but retreats of up to about 15 cents at a couple of Rockies points interrupted to some extent the meteoric rise that the regional market has seen since its latest crash last Thursday. The 37.7-cent spike by November futures on Tuesday had a lot to do with the cash strength, but it was supplemented by concerns about whether a low-pressure area in the eastern Gulf of Mexico (GOM) might affect any production and whether a recently identified La Nina event might result in a colder than normal winter.

Prices also got some weather-based support, although temperatures remain relatively mild in quite a few areas. The Midwest is warming up to highs around 80 degrees or so Thursday, with the Northeast getting a bit warmer than that, and peak readings from about 90 to the mid 90s will be in effect from the western half of the South through the desert Southwest. On the other hand, overnight lows in the 40s are due to maintain a modicum of heating load in the Pacific Northwest and parts of the Rockies.

Wednesday’s gains ranged from about a nickel to 65 cents. The Northeast and Pacific Northwest saw particularly strong upticks.

Whether the market can maintain this week’s overall advance was coming into doubt after the screen followed up Tuesday’s spike with a 15-cent reversal Wednesday. Also, it appeared that the GOM low was spurring few if any offshore shut-ins, and moderate conditions would continue to dominate the overall weather picture.

A Minerals Management Service spokeswoman did not return a call asking if the federal agency was getting any reports of GOM evacuations or shut-ins. However, a Reuters news service story indicated that offshore producers did not perceive any danger to their facilities from the rainy low-pressure system that was approaching and no one was planning to cut production as of Wednesday afternoon.

The National Hurricane Center continued to say the system has the “potential to evolve into a subtropical or tropical cyclone during the next day or so as it moves west or west-northwest about 10 mph.” The Weather Channel agreed that it had a “chance” of developing, but meanwhile the system about 300 miles south of Pensacola, FL, around midday Wednesday “has virtually no convection around it. Thus any further development, if it occurs, is likely to be slow.”

Kern River was up nearly 20 cents as it reported low linepack Wednesday in the three farthest downstream of its four segments. Questar was one of the two softer Rockies points, possibly because it reminded Interruptible Storage Service (ISS) customers that a 30-day mandate for them to remove all their ISS working gas from the pipeline’s Clay Basin facility that was issued Sept. 8 meant they only had through Sunday to complete the process.

A western marketer said he would expect lower cash prices Thursday after the Nymex reversal, especially since there is “very little weather-based demand” in most areas. This is especially so in inland California, where previously hot weather has greatly receded (Sacramento was expected to see a high in the low 70s Thursday). The marketer said he was hearing lot of talk about the La Nina event, but he wasn’t sure whether it really had much meaning for the gas market or not.

Ron Denhardt of Strategic Energy & Economic Research expects a storage build of 62 Bcf to be reported for the week ending Sept. 28. Consensus expectations appeared to be spread out more than usual, ranging from the high 50s Bcf to the high 60s Bcf.

©Copyright 2007Intelligence Press Inc. All rights reserved. The preceding news reportmay not be republished or redistributed, in whole or in part, in anyform, without prior written consent of Intelligence Press, Inc.