Natural gas bidweek trading for November was a study in contrasts, with double-digit losses in the nation’s midsection balanced by hefty gains in Appalachia, the Northeast, Rockies and California.

Once all the smoke had cleared, however, the NGI National Bidweek Average eased all of one penny to $2.53, which represented a nickel premium to November 2016’s $2.48 bidweek average.

The market point showing the greatest gain was Nova/AECO C rising C97 cents to C$2.16/Gj, and the greatest setback was seen at Columbia Gas, which fell 32 cents to average $2.44. Regionally the distance between gains and losses was high. Appalachia showed the largest uptick, rising 35 cents to $1.66, and the Southeast was the biggest disappointment, dropping 28 cents to average $2.77.

The Rocky Mountains, Northeast and California all made it to the plus column with gains of 12 cents to average $2.57, 17 cents to $2.50, and 32 cents to $3.05, respectively.

Regional losses ranged from South Louisiana dropping 23 cents to average $2.66, to the Midcontinent and Midwest falling 12 cents to $2.49 and $2.67, respectively.

November futures expired last Friday at $2.752, down 22.2 cents from the expiration of the October contract.

Bidweek traders weren’t persuaded by forecasts of cooler temperatures to alter their bidweek activity.

“We were able to get everything we needed and thought pricing was pretty reasonable,” said a Midwest utility buyer. “I will say that our forecast has changed a little bit from when we first started looking at it earlier in bidweek. November was supposed to be slightly warmer than average and now it’s 2-3 degrees cooler than average, but we’ll make that up in spot purchases.

“We are comfortable with where we are at. It seems like on Oct. 31, the day-ahead pricing was a little out of line where a lot of people got caught short,” he told NGI. “There was a big spike on gas day 31 and the next-day it came right back down.”

Weather forecasts Tuesday, although cooler, were not enough to entice futures buyers.

“The current six-to-10 day forecast is cooler than [Monday’s] forecast over the eastern half of the continental United States, aided by the day shift,” said WSI Corp. in a report to clients. “The western U.S. is warmer.” Gas-weighted heating degree days (HDD), it noted, “are +2.5 to 69.5, which are still 11.8 below average.”

WSI cautioned that “the forecast could sway in either direction,” depending on “the exact timing and details of a cold front. The south-central and eastern U.S. have minor warmer risks ahead of the front, but there are some cooler risks behind the front. The interior West and north-central U.S. have a warmer risk late.”

“I don’t anticipate there will be many changes,” said a Houston-based industry veteran. “The weather isn’t forecast to be all that cold…maybe a little bit more in the Chicago area, but I think that is well supplied now. It all depends on your outlook on weather, and it is a little hard to tell right now for a whole month.

“If there is an incentive to [anticipate weather changes] people will do that if the downside is pretty low. If there is some greater upside that you are able to participate in then a lot of times people will do that, but local distribution companies don’t have any incentive to do that. They are charged with being careful with the assets of their customers. They play it very close to the vest.”

As bidweek trading drew to a close on Halloween Tuesday there were a lot more tricks than treats handed out, as both physical and financial markets seemed stuck in reverse.

In physical trading, sharp losses in Appalachia and the Northeast tugged prices lower, but hefty losses were also noted in the Midcontinent, Midwest and West Texas as the market recovered from day 31 balancing the day before. The NGI National Spot Gas Average plunged 22 cents to $2.51 on Tuesday.

Futures bulls hardly did much better as funds and managed accounts piled on the short side as the technical condition of the market deteriorated. At the close on Tuesday December natural gas futures had fallen 7.0 cents to $2.896, and January fell 7.4 cents to $3.026. December crude oil gained 23 cents to $54.38/bbl.

Northeast locations posted losses of $1.00 or more as pipeline congestion eased.

Beginning Wednesday (Nov. 1) “Algonquin mainline compressors will return to full capacity,” industry consultant Genscape Inc. said in a report. The data analytics firm added that Stony Point will return to capacity of 1.113 Bcf/d, and Southeast will be “at full throttle” with 1.146 Bcf/d. This concludes the five-month maintenance for construction of the Connecticut facilities involved in the Atlantic Bridge Expansion Project, Genscape said.

Traders for now are taking a wait-and-see approach to the market and waiting for warm weather to play out.

“The primary focus remains on some mild temperature forecasts that are beginning to extend out to about the middle of November,” said Jim Ritterbusch of Ritterbusch and Associates in closing comments Tuesday.

“As HDDs remain downsized, the market appears to be pricing in a lack of any additional expansion in the supply deficit,” he said. Thursday’s Energy Information Administration (EIA) report “will likely post an injection proximate to the five-year averages that would leave the overhang modest at around 45 Bcf. And given the mild weather views that extend across Texas and the eastern half of the U.S., a peak in storage will likely develop later than is usually the case.

“Meanwhile, the money managers continue to add to existing short holdings with the benefit of today’s additional chart deterioration. Although we still view Friday’s November contract expiration at the $2.75 level as a bit out of reach for the December futures, a test of this support could develop by week’s end if the above normal temperature forecasts are extended amidst a bearish surprise out of the EIA. However, we are maintaining a sideline stance for now and would caution against any attempts to pick a bottom to this market.”

In Monday trading, futures traders were still licking their wounds from Friday’s free-fall, but some saw the decline potentially providing a fertile base of shorts from which to stage a winter season rally. At the close on Monday, December had risen two-tenths to $2.966 and January was lower by two-tenths to $3.100.

Risk managers were looking for higher prices to establish short hedges.

“We continue to see build in the natural gas storage which is negative for prices,” said Mike DeVooght, president of DEVO Capital. “The natural gas demand is relatively flat as we have had moderate temperatures throughout the U.S. We will continue to watch for a price increase as we enter the heat season and demand increases.

“On a trading basis, look to go long if the December and January contracts trade below $3,” as December has reached trading levels. “Our target to establish producer hedges is the $3.50 for the winter strip.”

Technical analysts saw the sharp decline Friday as perhaps eventually setting up a winter rally.

“There were a lot of people long, insisting we would get a pre-season rally anyway,” said United ICAP’s Walter Zimmermann in a webcast last Friday. “I suspect that length is getting flushed out this week. The implication is that there will be a re-test of the $2.52 low if not a test of the $2.12 area. The only intervening support is where we ended up Friday down off the high of $3.43.

“The only support between here and $2.52, is $2.65, but the irony of all this is that the further natural gas sells off, the better the case for some form of winter rally.”

Other analysts see a classic duel between supply and demand setting up for the winter.

“The mercury is set to drop soon, but few people (if anybody) sees a problem this winter in terms of supply in the U.S. market,” said ICAP Commodities’ Scott Shelton in a note to clients. “It will be cooler this winter, closer to normal really, but nonetheless, the experts say that demand will indeed impress. Storage won’t break any records, but it will be close. If the next five weeks look anything like this week, we’ve got a real horse race.”

Last Thursday’s trading found cash traders scurrying to get their deals done ahead of the often volatility-inducing EIA storage report. Gains in California and steady pricing in Appalachia were unable to offset weakness in Texas, Louisiana, the Northeast and Southeast. The NGI National Spot Gas Average fell 3 cents to $2.69.

The EIA reported a storage injection of 64 Bcf for the week ended Oct. 20, about even with market expectations, and prices registered nary a whimper once the figures were released. At the close last Thursday November had shed 2.9 cents to $2.890 and December had given up 3.1 cents to $3.051.

Prior to the release of the data traders were looking for a storage build about equal to the actual figures. Last year 74 Bcf was injected and the five-year average stood at 75 Bcf. ION Energy’s Kyle Cooper calculated a 63 Bcf injection, and Gelber and Associates was looking for a 68 Bcf build. A Reuters survey of 24 traders and analysts showed an average 65 Bcf build with a range of +60 Bcf to +70 Bcf.