Continuing to ride the support of chilly weather across much of the northern tier of states and getting an unexpected goose from a soaring oil market, cash prices rose again Wednesday but in nearly all cases by lesser amounts than on Tuesday. Some sources believe that what is expected to be another storage injection report close to 100 Bcf Thursday will halt this week’s so-far steady price advance.

Most of Tuesday’s gains were on either side of a dime, but some were only 3-6 cents or so. The West tended to see most of the larger upticks.

The natural gas screen stayed in positive territory Wednesday morning and eventually recorded a increase of 7.7 cents, but that paled in comparison with action in the oil products pits. Crude oil futures soared by more than a dollar to well over $28/bbl after OPEC caught many traders off guard by announcing 900,000 bbl/d in cuts to member production quotas. The contract for heating oil, the chief competitor of gas in the winter heating market, also saw a major advance.

Although colder temperatures are expected in the North by the weekend, a cooling trend appeared to be leveling off at least temporarily in much of the East. Only parts of the Upper Plains states were experiencing lows less than 40 degrees Wednesday. Most of the South can anticipate pleasant conditions Thursday. Fading Tropical Depression Marty was bringing heavy rain into southern Arizona Wednesday, with the possibility of it spreading into New Mexico and West Texas. However, some desert Southwest highs are likely to be approaching triple digits again Thursday.

A Midcontinent/Midwest trader said he was one of those “still thinking a big EIA [storage] number will have both the futures settlement and cash retreating” Thursday and Friday. There’s just not enough cold weather to keep sustaining further increases, he added, and besides, “the cold isn’t where it needs to be” for stronger prices. Right now the worst stuff is in the Upper Plains (Montana and the Dakotas) and there’s not enough people living in that region to make a significant difference in the market, he said. “It [cold] needs to get over to population centers like Minneapolis and Chicago to have real price impact.”

Sure, the Midwest will be experiencing a few Heating Degree Days in the next couple of weeks, “but it’s nothing that they [utilities] can’t handle with what they’ve already got [storage],” the trader went on. “For now, I’ve still got my bear hat on.”

A Northeast marketer had a little more faith in weather support for prices in his region. He acknowledged that a big storage refill could put a damper on price strength, “but cool weather fundamentals are supporting things for now,” he said.

A couple of sources reported that screen firmness helped a moderate rise in late cash prices. A Gulf Coast producer noted that basis spreads from the market area encouraged eastern traders to buy in the Gulf Coast and transport to the Northeast. “With a 40-cent spread to start the day, it made perfect sense to move that gas. In particular, we had an average of 41 cents from the Henry Hub to New York.”

A significant chunk of offshore Gulf Coast supply will be off the market Thursday through Saturday as Destin Pipeline shuts down for maintenance (see Daily GPI, Sept. 12). A request for approximate recent Destin throughput was not answered. The pipeline has 1.2 Bcf/d of capacity, but is believed to be moving only about half that volume in recent weeks.

Northern Natural Gas projected that system temperatures would be averaging on either side of 50 degrees Wednesday through Saturday, compared to a normal system weighted figure of 59 degrees.

The Atlantic tropical scene was stirring a bit, but with nothing significant to the gas market as of Thursday. A group of thunderstorms several hundred miles southwest of the Cape Verde Islands off West Africa was likely to see only slow development as it moved westward, The Weather Channel said, and upper-level winds were likely to slow any strengthening of a disturbance about 275 miles south of Bermuda. No surface low was present in a cluster of thunderstorms and showers in the south-central Caribbean Sea, but upper-level winds there “appear to be favorable for additional organization of the system,” TWC added.

The National Weather Service sees a divided nation next week, temperature-wise. For the Sept. 29-Oct. 3 period it projects below normal readings for all areas east of a line encompassing East Texas and all of Oklahoma except its Panhandle and running due north from there. The forecast is above normal for everything west of a line running south along the eastern edge of Montana into West Texas, except for most of California, which is due to see normal temperatures along with the central U.S. strip between the other two forecast regions.

Kyle Cooper of Citigroup said his final estimation for this week’s storage report sees a build of 95-105 Bcf, which would compare with volumes of 66 Bcf a year ago and 73 Bcf in the five-year average.

A Southwest marketer said most people wanted to see EIA’s storage number before they get active in bidweek, “but there’s a lot of supply out there with very few buyers at this point” Wednesday.

The October market looked stronger to a Northeast trader, who said forecasts of a cold snap coming into the Northeast in the first week of October were generating strong basis numbers that prompted him to expect indexes to gain over September levels. However, he agreed Wednesday that there was “some talking about October, but not a lot of dealing yet.”

A New England utility buyer said some people want to trade October gas Wednesday, but having just gotten back from vacation, she had too much catch-up work to do before getting into bidweek discussions.

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