This week’s market may have resembled the one of the previous week in starting out with major gains Monday, but it took a lot less time to acknowledge the continuing overall weakness of weather demand as prices fell across the board Tuesday. Even with increases in heating load on tap for Wednesday in such key gas-consuming regions as the Midwest, fundamental support proved inadequate to keep the market from reverting to its losing ways of last Thursday and Friday.

Tuesday’s declines ranged from about a dime to nearly 45 cents.

December futures will lend scant support to Wednesday’s cash trading for the last five days of December, having gone off the board Tuesday with an increase of 1.3 cents (see related story).

Midwest temperatures will slide a bit Wednesday, with a low of 37 predicted for Chicago, and Minneapolis expected to see below-freezing mercury levels. However, that will essentially be offset by modest warming trends in the Northeast and some parts of the South.

Forecasts of Alberta lows in the 20s still failed to keep Western Canada points from seeing some of Tuesday’s largest losses. Similar cold conditions expected in the Rockies kept price drops there smaller than in most other regions.

The PG&E citygate and Malin dropped about 20 cents and a little less than 30 cents, respectively, after PG&E issued a high-inventory OFO for Wednesday (see Transportation Notes). The Southern California border and SoCal citygate got no price benefit from SoCalGas ending a high-linepack OFO as the two points fell about a dime and nearly a quarter, respectively.

A western trader noted that chilly weather in Northern California seemed like it might have kept PG&E from issuing the OFO, “but people are trying to stuff storage now” because they see higher prices in the Nymex strip for the next couple of months. Undoubtedly there are some people in PG&E service territory revving up their furnaces, he said, but it’s not enough to soak up the excess supplies. He expects the OFO to stay in effect going into the holiday weekend.

The trader said there might be “a little bit” of December baseload gas traded Wednesday, but he thought nearly everybody was trying to finish bidweek deals by the end of Tuesday.

Observing that his state has very little heating load even in December, a Florida buyer said he only picked up two small December packages — one in Florida Gas Zone 2 at index flat and the other in Florida Gas Zone 3 at basis of plus a penny. There were quite a few “aggressive” sellers in Zone 3, he said, because he was seeing a lot of index-flat offers late Tuesday. In some southern parts of Florida there may still be a bit of air conditioning load left, he said.

Stephen Smith of Stephen Smith Energy Associates said he is projecting a storage build of 2 Bcf for the week ending Nov. 20, which is down from a previous estimate of 5 Bcf.

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