The spotlight quickly shifted Friday from the sharp prices declines, which were due to reduced weekend demand and milder weather, to the American Gas Association’s announcement that it will stop publishing its weekly natural gas storage statistics at the end of the year.

The Association said the survey was too labor intensive and that it felt it could spend its time more wisely. But several sources believe AGA could no longer stomach the bitter responses from marketers and traders to a number of storage revisions, particularly the last 47 Bcf revision in mid-August, which some said triggered legal threats against AGA (see related story this issue).

“They should have stuck in it, but they have been getting a lot of grief and it’s not even their fault necessarily,” said one marketer. “They may have been receiving bogus information, so they got stuck between a rock and a hard place.”

The association also may have felt some pressure from FERC Chairman Pat Wood, who commented on the market’s reliance on the weekly storage report. The chairman’s remarks actually were complimentary to AGA’s long record in providing the market information, and his move to get FERC and the Energy Information Administration into more data gathering was aimed at providing the market with more information. AGA denied the chairman’s remarks had anything to do with its decision, and sources said the timing was just coincidental.

Whatever the reasons are for AGA’s decision to discontinue the survey, few doubt that the market will suffer. There will be greater uncertainty on a weekly basis about the fundamentals of supply and demand without the industry’s best source of weekly fundamental data. And it may be difficult for others to fill the gap, since they do not have the leverage that AGA does with its member storage operators.

“It will leave a lot of people in the dark,” said one marketer. “There is no other timely source of storage information and weekly data is critical to making decisions efficiently and with little risk. What are we going to do, rely on two-month-old EIA data? I guess that’s what it will have to be. It’s going to increase price volatility, I can tell you that. If FERC pressured AGA into doing this, I think they are going to regret it.”

“After the first of the year, Wednesday’s are going to be a lot different on the Nymex,” said an LDC buyer. “I think the decision will actually decrease the volatility on those days. However, that volatility might show up at another time.”

The AGA’s decision overshadowed some significant price erosion entering the weekend on Friday. Spot price gains made on Thursday were quickly wiped away, as the market suffered from sharp demand declines due to the normal weekend lull and a significant warm-up in temperatures across several major markets. Prices dipped 5-15 cents across the board with the largest decreases occurring in the Northeast and Midcontinent markets. Rockies, Northern California and Pacific Northwest locations lost a dime or more on average.

“SoCal border prices stayed strong,” said one western region marketer. “San Juan stayed up because of the cold weather. Northwest Pipeline has a warning for overrun entitlements. People are sucking gas off the pipe. The utilities are nominating more gas to flow than they actually have, because it’s been so cold in the Rockies and Northwest. Monday temperatures are supposed to be back to normal in the Rockies, but they had snow yesterday. On Thursday temperatures in Denver were 18 degrees below normal in the low 40s for a high, but Saturday it’s supposed to be 60 degrees, so a lot of heating load was lost for the weekend.”

In the Gulf Coast region weekend cash was “pretty nasty,” according to a Gulf Coast marketer. “Futures came off pretty hard. The Henry Hub started trading around $2.41 and went out trading $2.16. There’s just no demand right now, especially for the weekend with industrial loads off. Market prices hung right with the Gulf. NY was about 20 cents over the hub. Texas prices seemed relatively strong. Katy was only few cents less than the hub, rather than 10 cents back, which is what it’s been lately. People are still running their air conditioning in Texas, so power loads are still there.”

Temperatures in Chicago and the upper Midwest are supposed to be mild on Saturday, but then there’s supposed to be a cooling trend Sunday and Monday. There’s going to be about a 15-degree drop in temperatures between Saturday and Monday. “But what we need here is sustained cold,” said a Chicago trader. Chicago and Michigan prices dropped about a dime Friday.

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