A 31.6-cent near-month futures dive on Wednesday, continuing futures weakness Thursday and approaching rewarming trends in some of the areas affected by a cold wave brought this week’s three-day cash market rally to an end on Thursday.

Only strong gains by several Rockies points (which still were the lowest-priced locations in the cash market) ran contrary to overall losses that ranged from about 15 cents to 65 cents or so.

Thursday’s general downtrend had been predicted by a producer Wednesday, who cited not only that day’s futures softness but also pointed to forecasts indicating that the much colder weather that prompted rising prices Monday through Wednesday at most or all points would be short-lived outside the Midwest and Plains states.

A cash market rebound Friday is considered highly unlikely. The tendency toward higher temperatures will become more firmly entrenched over the weekend in the Northeast and South, and even the Rockies will start seeing milder weather (Denver’s high around 52 degrees Thursday is expected to rise to 62 degrees Friday).

Also, November natural gas futures shed another 36.8 cents Thursday. The Energy Information Administration was well within the range of prior expectations in reporting a 62 Bcf storage build for the week that ended Oct. 6, although the number was slightly below consensus estimates centered around the mid 60s Bcf. Nymex traders apparently were more impressed by the record-setting level of storage prior to the end of the traditional injection season and the cash market’s weakness in pushing the futures screen lower again (see futures story).

Another negative factor for Friday prices is that the loss of industrial load over a weekend will come into play.

Gulfport Energy said it shut in its West Cote Blanche Bay field in South Louisiana Thursday after a tugboat and two barges hit a gas pipeline there, killing two and injuring at least two others. An official at the Oklahoma City-based company could not be reached for an updated report on field production, but it was producing 192 MMcf/d there as of June 30 (see related story).

The PG&E citygate had managed to spike by more than half a dollar Wednesday despite the utility declaring a systemwide high-linepack OFO for Thursday. The OFO was extended through at least Friday, and this time the citygate responded more predictably by falling about 20 cents.

A Midcontinent producer jested that maybe prices had gotten “unlucky” because the gas was being traded for Friday the 13th flows. More seriously, he said Thursday’s storage report served to confirm — as if any further confirmation was necessary — that the industry has plenty of storage to meet the needs of any kind of winter. He also thought it likely that some Midwest market-area utilities may have been withdrawing storage to cope with their current heating demand needs rather than buying swing gas, putting further downward pressure on prices.

However, the producer also said he saw incremental utility purchases “by some players who usually aren’t in the market.” It was not a case of bargain hunting, he emphasized, since even with Thursday’s losses current spot prices remain way above first-of-month indexes (the Chicago citygate traded an even dollar above its index).

He said he was unaware of any wellhead freeze-offs from this week’s cold spell because freezing temperatures had been rare and brief in the production area.

“The screen rallied big last week” in anticipation of the coming cold, the producer continued, and now profit-taking appears to be taking it lower again. He saw a residual benefit of the cold spell in that it likely helped flush out some storage injection space that can give gas a home when more moderate weather returns.

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