As Wednesday’s swing to mixed pricing that was mostly softer had hinted, the impending return of warmer weather in the East and the depressant effect of four straight losing sessions by December futures combined to bring cash prices down hard at nearly all locations Thursday. Only flat El Paso-San Juan numbers averted a total sweep of softer quotes.

Other than San Juan, prices fell by anywhere from about C15 cents at Westcoast Station 2 to nearly $1.50 into Kern River. Gas was trading as low as a penny again at three Rockies locations — Kern River, Northwest-domestic and Opal. CIG quotes bottomed out at a nickel, while the pipe averaged about 40 cents. But that wasn’t the day’s low average by any means. Northwest-domestic and Questar came in a little under 40 cents, Opal was around a quarter, and Kern River came in lowest at a little more than a dime (it also claimed the day’s biggest plunge).

The latest woe to hit the Rockies market was Thursday’s declaration of a Strained Operating Condition by CIG, which said its storage fields are either full or on the verge of it (see Transportation Notes). Excess injections and/or account volumes are subject to unauthorized overrun charges, CIG said.

The reason for San Juan flatness wasn’t apparent, but temperatures are still hitting highs around 90 in the desert Southwest.

The Energy Information Administration was slightly high but generally in line with expectations in reporting a 36 Bcf storage build for the week ending Nov. 2. Despite the bearishness of pushing the bar for record inventories even higher, the December futures contract finally pulled out of its recent tailspin with a rebound of 8.9 cents. That’s unlikely to impress the cash market Friday, though, as moderation of cold weather is expected to continue into the weekend.

Although freezing lows are predicted for Friday in upstate New York and parts of New England, the Northeast in general will be in a slight warming trend. The South has returned to merely cool to chilly, and the Midwest will also be moving that way going into the weekend. The West remains mostly comfortable except for mountain snows at some locations.

A Calgary-based producer said he didn’t have time to discuss the market Thursday afternoon because he was having to deal with a Vector Pipeline force majeure into Dawn (see Transportation Notes). Because the force majeure notice wasn’t posted until near the end of cash trading, Dawn’s decline of about 40 cents was in line with the rest of the Midwest. But with Vector deliveries to Dawn being cut to zero Friday, there likely will be more impact if the curtailment extends into the weekend.

Get set for an extended period of mostly softer prices, said a Northeast marketer, because the latest weather forecasts indicate that next week’s above-normal temperatures in nearly all regions will extend into the following week as well. He suspected that the crude oil market’s strength helped to buoy cash gas earlier in the week despite soft gas futures.

“We had a nice little blast of cold air this week,” the marketer continued, but the cold was already slipping a bit and it should be a pretty nice weekend in the Northeast. Gulf Coast-Northeast basis spreads were getting back to normal after stretching to as much as $1.20 earlier this week between Henry Hub and the Algonquin citygate, he said. He didn’t think much gas was getting taken out of storage even during the recent cold snap.

For a Lower Midwest utility buyer, it was “already feeling pretty nice outside” Thursday, mainly because of no wind. That meant his system throughput was getting kind of puny again. Of course, “October wasn’t much” as far as cold weather goes either, he said.

©Copyright 2007Intelligence Press Inc. All rights reserved. The preceding news reportmay not be republished or redistributed, in whole or in part, in anyform, without prior written consent of Intelligence Press, Inc.