For several sources there were absolutely no ifs, ands or buts about it: Wednesday’s spikes of about 30 cents to a little more than 40 cents throughout eastern markets were caused by “storm hype,” pure and simple. Although Pacific Northwest and California points participated to a lesser degree in the overall bull market, most of the Rockies and San Juan Basin numbers were moderately softer.

“I think it was all storm hype,” as a Gulf Coast producer bluntly put it. A “war premium” has already been built into the strength of oil futures, he said, so don’t consider that a factor in the gas market. “People have been saying for three months that this market has no fundamental support, but technicals continue to rule,” the producer added. He noted that natural gas futures hit their daily high of $3.85 while cash was still trading, which probably gave a little extra boost to the eastern firmness. But the subsequent screen retreat of nearly a dime from the high may help cool things off a bit in the cash market Thursday, he said. “At some point I see this thing coming off big [20 cents or more], but is 20 cents really ‘big’ any more” when prices have skyrocketed to $11 (Transco Zone 6-NYC) and $8 (Florida citygate) as recently as this summer, he asked rhetorically.

An East Coast utility buyer was in complete agreement about the hype factor, saying, “It’s ridiculous for prices to be this high.” She noted that a few Gulf Coast premium points, such as Transco Station 65, started to approach the $4 level in late deals. With the uncertainty of where Tropical Storm Isidore might go, that should make for a second straight “interesting” weekend for traders, she commented.

After lashing the island nation of Jamaica for much of Wednesday, Isidore was gathering strength in the northwestern Caribbean late Wednesday afternoon, according to the National Weather Service. At 5 p.m. EDT the storm’s center was about 165 miles east of Grand Cayman and moving to the northwest, a track which would take it between the western end of Cuba and Mexico’s Yucatan Peninsula into the Gulf of Mexico. With maximum sustained winds near 60 mph, Isidore already wasn’t far from hurricane status (74 mph) and was likely to get there within 24 hours, NWS said.

A second tropical storm, Josephine, is a non-factor in the gas market. It was about 950 miles east-northeast of Bermuda and speeding up while heading northeastward, which would keep it far out in the Atlantic.

For New York City-based Weather 2000, Isidore is potentially the “first major hurricane in the Gulf in several years.” Eventual “entry into the Gulf of Mexico (that theoretical line drawn between Cancun [Mexico] and Miami) is almost a certainty at this point sometime early Friday or no later than Saturday,” the forecasting consultants said in an advisory.

Other than Isidore, weather conditions generally remain unsupportive of higher prices. Only triple-digit high temperatures in the desert Southwest and scattered areas of the South reaching the low 90s provide a modicum of air conditioning load.

The Rockies was missing out on yet another bull market for no apparent reason, a marketer remarked. His early Opal deals were done in the mid $0.90s, but prices rallied to a little more than a dollar later, he said. The marketer said Jonah Field production behind the Opal Plant was “still having some issues as I understood, but the cuts there must not be as bad as last week.” The forced withdrawals of Clay Basin interruptible storage this month may be having an impact as that gas continues to come into an already weak market, he said.

Another trader said that western markets wouldn’t be as much subject to storm hype as points in the East, so she thought the West’s non-Rockies/San Juan strength was based largely on recent Nymex gains.

“Isn’t it crazy about the [PG&E] gate?” asked a source marveling about the citygate’s gain of nearly 15 cents despite PG&E scheduling a second day of a high-linepack OFO for Thursday (see Transportation Notes). “It’s been pretty strong all month, but there’s nothing I can put my finger on” with regard to its advance in the face of the OFO. There are a lot of citygate bidders in the swing market each day, he went on, “and everybody knows it’s almost always going to rise.” He observed that a few “hubs” and storage owners that do park and loan deals have been very active recently, and paybacks being made to them now may have been part of Wednesday’s bullishness.

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