Cash prices overall averaged about 9 cents lower Monday as trading rosters were thinned by the holiday and near-term weather was close to seasonal conditions. Eastern points fell along with Gulf quotes, but California locations were mostly steady to higher.

At the close of futures trading, November had added 0.7 cent to $3.403 and December had managed a rise of 1.5 cents to $3.697. November crude oil dropped 55 cents to $89.33/bbl.

Eastern marketers observed erratic trading activity without much buying interest. “Everything was pretty spotty. There wasn’t a whole lot of demand, said a Houston-based trader.”

Meteorologists suggest a warming trend may be in store for next week. “Oklahoma City had its earliest subfreezing reading ever! However, even though it is chilly out this morning, the chill will soon be out of the area. And in the Northeast, where a couple of chilly shots are coming in this week, next week could very well be milder,” said AccuWeather.com meteorologist Elliot Abrams on his blog.

AccuWeather.com forecast that the high in Boston Monday of 59 would hold for Tuesday before rising to 62 on Wednesday. The normal high for Boston at this time of year is 65. New York City was predicted to see its Monday high of 59 rise to 60 Tuesday before climbing to 69 on Wednesday, 2 degrees above its normal high.

Both New York and Boston are starting the month out on a warm foot. AccuWeather.com said Boston was averaging 3.4 degrees warmer for October and New York was coming in 3.3 degrees warmer.

Quotes on gas destined for Algonquin Citygate fell 10 cents to average $3.55, and deliveries to Iroquois Waddington tumbled 14 cents to $3.51. At Tennessee Zone 6 200 L next-day gas fell 28 cents to $3.55 on light volume.

On Dominion Tuesday gas was a dime lower to average $3.19, and on Tetco M-3 next-day gas came in at $3.39, 7 cents lower. Gas into Transco Zone 6 New York slipped 9 cents to $3.36.

In contrast, next-day gas prices on the West Coast were little changed as temperatures were forecast to stay close to seasonal norms and power load was expected to hold steady.

AccuWeather.com predicted the high in Los Angeles Monday of 78 would ease to 76 on Tuesday before slipping further to 70 on Wednesday. The normal high in Los Angeles at this time of year is 80.

Power loads were forecast to remain at nominal levels. The California Independent System Operator predicted Monday’s peak load of 31,227 MW would rise to only 31,365 MW Tuesday.

At Malin next-day deliveries fell 9 cents to $3.17, but at PG&E Citygate Tuesday gas was down a cent at $3.83. SoCal Citygates were up 2 cents to $3.52, and SoCal Border quotes came in at $3.39, up a penny. El Paso S Mainline Tuesday deliveries were 2 cents higher at $3.40.

Gulf points took a hit. ANR SE was quoted at an average $3.12, down 7 cents, and Tennessee 500 L dropped 6 cents as well to $3.19. Parcels into the Henry Hub fell 8 cents to $3.18, and next-day gas on Tetco E LA fell 4 cents to $3.12. On Columbia Gulf Mainline Tuesday gas was quoted 8 cents lower at $3.15, and gas into Transco Zone 3 fell 8 cents to $3.15.

Futures trading was lackluster. “I guess with the [Columbus Day] holiday it was slower than slow,” said a New York floor trader. “We traded down to $3.327, and under that you have support at $3.25 with a little at $3.30. The market does have a tendency to bounce off these support numbers. We are holding on for the moment.”

Risk managers see prices approaching levels that are attractive for short hedges. “The buying we have seen over the past couple weeks could very well be buying prior to the winter heat season,” said Mike DeVooght of DEVO Capital, a Colorado-based trading and risk management firm. “Or it could be that we are just continuing to trade the range and we are approaching the topside of that range. We are hitting levels that we are willing to start to do a little selling in the winter strip ($3.75-4.00),” he said in a weekend note to clients.

Weather forecasters are calling for somewhat above-normal temperatures for the latter half of the month, but that is not expected to translate into any great increase in energy requirements. Commodity Weather Group in its six- to 10-day outlook shows above-normal temperatures in a fairway bordered by the Continental Divide on the West and a line extending from western New York and panhandle Florida on the east.

“After the current impressive cooling over much of the eastern two-thirds of the U.S., we continue to watch demand-benign warm weather return to dominate the six- to 15-day time frame. The models are in fairly good agreement this morning on the big picture view, but we continue to see bigger splits in the 11- to 15-day pattern indications as the American and European ensembles split over the Alaska area,” said Matt Rogers, president of the firm.

“The American operational [weather model] actually sided more with the Euro ensembles this morning, especially by the second half of the 11-15. This could translate into a strong cool push in the West and then Midcontinent by late period (as GFS [Global Forecast System] Op[erational model] shows), but the large spread on the ensemble members is keeping confidence to the low side.”

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