Forecasts of moderating weekend weather in much of the western two-thirds of the U.S. and a prior-day screen drop of nearly 20 cents combined to create double-digit price declines at all points Friday that generally were almost as large as Thursday's run-ups. The slump of industrial load that accompanies a weekend was another bearish influence.
The Northeast, Midwest and Midcontinent markets tended to take the biggest hits among losses ranging from a little more than a quarter to about 85 cents. Rockies/Pacific Northwest points saw most of the smaller price dips.
The cash market may have to struggle if it attempts a rebound Monday. After spending much of Friday in positive territory, expiring November futures took a late dive to wind up 34.4 cents lower. And most of the South and West will begin this week at normal to above normal -- comfortable, that is -- temperatures for late October.
Malin and the PG&E citygate had managed to rise nearly half a dollar Thursday in the face of PG&E keeping a high-inventory OFO in effect Friday. They joined the overall market softness Friday by dropping nearly half a dollar and about 40 cents respectively Friday as the utility extended the OFO through at least Saturday (see Transportation Notes).
"There's too much gas out there," said a Midcontinent producer in trying to explain the late reversal at Nymex. Nobody is buying a lot of November baseload supply with storage virtually full, he said. However, he noted that the first few days of November will see below normal temperatures continuing in most of the East, so that may provide some price support in the near term.
Most of the time last week producers had to make their sales early or they were toast because prices tended to fall in late trading, the producer went on. However, Friday was different in seeing "a little bit" of rebound near the end, he said. Daily Midcontinent prices last week were mostly 20-30 cents above the comparable November numbers, he said.
"Winter is starting to arrive," commented a Calgary-based producer who noted that area temperatures weren't very far above freezing Friday. His company finished bidweek trading Friday, and he said his final Chicago citygate sale was at index plus 2 cents.
A Northeast utility buyer thought the late futures dive was a result of the November contract being "overbought." Despite his area's reputation for chilly Novembers, he was buying only a little baseload gas. The company has several flexible winter term deals in which daily flows can be turned on and off as necessary, he explained. Also, the utility has topped off its storage accounts and will start taking some gas out next month, he added. Local temperatures were a little below normal Friday, he said.
The Baker Hughes count of rigs drilling for gas in the U.S. rose by eight last week to 1,450 (http://intelligencepress.com/features/bakerhughes/). That was unchanged from a month earlier but up 16% from the year-ago tally, Baker Hughes said.
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