Hardly any area can claim to be as much as “warm” any more, but generally seasonable temperatures dominating the near- to intermediate-term weather outlook early in the fledgling heating season resulted in dropping prices across the board Friday. The weekend decline of industrial demand and the bearish nature of the previous day’s storage report were additional market depressants.

Virtually all locations recorded losses in double digits as they ranged from about a dime to nearly half a dollar. A slight majority of dips were around 20 cents or greater. They tended to be distributed fairly evenly among the various geographic market areas, although most of the largest ones were concentrated in the Northeast.

Nymex traders appeared to be paying more serious attention to Thursday morning’s report of an above-expectations storage injection. Whereas December futures fell a minuscule 0.3 cent on the day of the report, Friday’s decline was considerably larger at 6.5 cents (see related story).

After passing to the north of Bermuda Friday, Tropical Storm Sean continued to weaken and was expected to become subtropical that night as it move northeastward toward the cold waters of the North Atlantic.

Although some gas-fired furnaces undoubtedly would keep running through the weekend, there was little call for new purchases of spot gas as some areas such as the western South through the Southwest were due to be mild enough to avoid any heating needs, and demand in more northerly climes likely was being met by winter term contracts and storage use.

After widening to 4 cents Thursday, the CIG-Henry Hub basis spread contracted back to about 2 cents Friday.

A hint of the dwindling heating load in the Midwest came from the Chicago citygate falling about 30 cents and its volumes traded on the IntercontinentalExchange platform taking a dive from 854,700 MMBtu Thursday to 661,900 MMBtu Friday.

A Texas-based marketer noted that starting toward the end of this week, the National Weather Service is predicting that the eastern two-thirds of the U.S. will experience above-normal temperatures pretty much through the end of November. A little more than a month ago above-normal still meant some appreciable cooling load, he said, but now the market is in a period where “above normal” creates essentially nothing in either heating or cooling load.

The marketer agreed with other sources’ comments last week that an extended blast of below-freezing conditions is about the only thing that will rouse the market out of its current bearish torpor. However, he added the caveat that major cold will be meaningless to the gas market if it’s largely confined to sparsely populated areas such as the Upper Plains and northern sections of the Rockies.

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