Spikes of 40-50 cents or so Friday at San Juan Basin/Rockies points were in sharp contrast to losses of about 15 cents to more than 30 cents in the rest of the market.

A Midwest utility buyer attributed the weekend softness mostly to Thursday’s Nymex drop following a bearish storage report, saying, “The screen today [Friday] didn’t fall much more until near the end of cash trading.” She didn’t see any significant break in this week’s cold weather coming, “at least not in the Midwest.” Temperatures would get “a little milder for the weekend, but then it gets colder again,” the buyer said. Ranges were fairly tight because prices didn’t see a further mild retreat until near the end of trading, she said.

A Gulf Coast/Northeast marketer agreed that weather was not much of a factor in Friday’s declines because there would be little appreciable change before colder temperatures return to northern market areas early next week. However, he thought it was a combination of Thursday afternoon and Friday morning screen softness that brought cash lower. “Technically the Nymex was looking weaker all around [Friday] and broke through some critical levels,” he said. (The crude oil and heating oil contracts registered major losses.) The marketer also noted that lower weekend load played its usual part. “Call it all of the above” except weather, he concluded.

But for a western trader, weather was pretty much the whole story in Rockies and San Juan prices defying the overall downturn in a big way. Snowy and frigid conditions were not only getting worse in the region but also spreading, he said. “Wednesday and Thursday it was seriously bad winter weather around Denver, and now [Friday] it has reached Salt Lake City.” Several utilities that had been resisting the urge “finally bit the bullet and started buying new production again,” the trader said. Cheyenne Hub, which easily surpassed the rest of the Rockies by trading above $3, was boosted by the rising Salt Lake City-area demand because the hub gets much of its supply from Questar via WIC, he said, and more Questar gas was staying home than usual.

As recently as a month ago (Sept. 25 trading on CIG and Questar), Rockies quotes were still below a dollar in a few cases. Commenting on the regional market’s volatility since then, one source said Rockies supply is transportation-constrained gas “that only finds a good home when there’s some ‘weather’ around.”

The PG&E citygate was a great bargain in the high $3.90s Friday when compared to PG&E-Topock numbers averaging only about a nickel less, a marketer said. He was glad to have snapped up a citygate package at $3.98, citing variable costs of about 22 cents from Topock on PG&E’s Baja Path.

A trader in Calgary said intra-Alberta numbers falling more than C30 cents into the high C$5.20s was largely a function of screen softness both Thursday and Friday. A Friday morning advisory by NOVA warning about high linepack (see Transportation Notes) may also have helped drive prices lower, she said, but the linepack situation was turning around that afternoon and she didn’t expect the pipeline to change imbalance tolerances.

“You’d think that with two days of 25% [imbalance] tolerance, FGT [Florida Gas Transmission] would just go ahead and lift its Overage Alert Day notice, but that’s FGT for you,” a buyer said. She added that maybe the restoration of MOPS flow (see Transportation Notes) will increase the liquidity of FGT’s Zone 1 again, noting that quite a few shippers were avoiding Zone 1 gas last week.

According to a Northeast utility buyer, even with Friday’s drops, cash numbers “should be considered relatively firm” because they’re staying on top of the screen and not discounted as usual. He also noted that swing gas is trading stronger than for next month, which he attributed to hurricane-related lost production still being felt in late October, but unlikely to carry over into November. “I still haven’t gotten some offshore platform production back,” he said.

Looking ahead, the buyer commented, “We’ll see what happens this winter when people are having trouble finding suppliers because of credit issues and a lot of the normal large middlemen have dropped out of the business.”

A trader confirmed the above buyer’s perception of weaker November pricing, reporting a bidweek purchase Friday in FGT’s Zone 2 at $4.12, a dime less than her weekend deal at the same point.

Salomon Smith Barney analyst Kyle Cooper said he is looking for a storage refill figure between 10 and 20 Bcf in this week’s EIA report, which would be well below the comparable volumes for last year and the three-year and five-year averages. “Based on the weather forecasts, a draw for the week ending Nov. 1 is expected,” he added.

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