Spot gas prices quickly rebounded from the long holidayweekend’s overall softness and made large gains across the boardTuesday. Rocky Mountains/San Juan points led the way with gainsranging from about 20 cents to a little more than 60 cents.

Although the south-central U.S.’s recent siege of record-settingheat is due to begin abating this week, weather fundamentals stillplayed a significant role in the market, sources said. Chief amongthem was the potential for Hurricane Ernesto, which is what atropical wave that was about 800 miles east of the Lesser Antilles(the island chain north of Venezuela) yesterday afternoon would benamed if it gets to tropical storm status).

In addition, summer heat continues to prevail in much of theSouth and West at the same time that a number of scattered nuclearpower plants are down either for planned refueling and/ormaintenance or for unanticipated events. The latter categoryincludes the Diablo Canyon 2 unit in California, which is expectedto come back online around mid-month after a condenser unit leakallowed salt water to enter the steam cycle over the weekend, andthe Wolf Creek plant in Kansas, where an electrocuted squirrelreportedly caused a fire in the auxiliary transformer.

To top it all off, the Northeast that has been so unusually coolall summer is now chilly enough that frost and freeze advisorieswere posted in New England and eastern New York for this morning,one forecasting service said.

Traders saw other reasons for bullishness. Besides firmerfutures throughout the energy complex Tuesday, the cash market alsowas building on the Merc’s strong close Friday, a marketer said.And several people noted that storage concerns for the winterremain a strong motivator for gas buyers.

It was up, up and away all day in the Pacific Northwest market,said one source who linked major price strength at Sumas tointra-Alberta numbers that climbed above C$6. In turn,intra-Alberta firmness was related to both rising futures and to aSaturday evening rupture on NOVA’s 12-inch Worsley LateralExtension (see story below). Service was restored Tuesday morningin parts of the lateral, but several facilities were still down foran indefinite period.

San Juan Basin’s increase of about 50 cents compared with asmaller rise of about 30 cents at the Southern California border toreduce partially what had become an abnormally wide basis gap.After stretching to $2.82 during bidweek, the basin-border spreadnow stands at a little more than $2.10.

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