Prices rallied solidly across the West Monday, but the market was clearly a mixed bag in the East, although eastern gains tended to slightly outweigh losses. More heating load was starting to show up in some regions, particularly the Midwest, and Monday’s spot prices also derived support from the screen’s 33.2-cent spike on Friday.

Increases ranged from just under a nickel to around $1.40 (CenterPoint-West’s advance of about $2.70 was a bit of an aberration since the point is so thinly traded and saw a Friday decline much larger than the overall market). On the negative side of the price coin, losses ran to as much as about 80 cents. Louisiana points tended to see the greatest mix of both ups and downs.

Except in South Texas, most Transco points were especially weak due to the pipeline calling an Imbalance OFO for Tuesday after shippers continued to pack its system over the weekend (see Transportation Notes).

Whether rising or falling Monday, prices continued to trade at tremendous discounts to first-of-month indexes. Even the relatively strongest, Sumas, was at a discount of $3.30, while other shortfalls from index ranged from about $3.45 to nearly $7 (Dominion).

Thanks to weather due Tuesday more closely resembling winter than what it has seen so far this fall, with what The Weather Channel called “near-blizzard conditions” in parts of the Upper Midwest, Midcontinent/Midwest prices were generally strong. However, Michigan citygates softened, with one source suggesting that the state’s abundance of storage capacity may have played a role.

The West is also getting some stormy wintry weather in its upper portions, and Tuesday’s lifting of a high-linepack OFO by SoCalGas after three days (see Transportation Notes) also provided some more positions to place gas.

The South can expect a cold front Tuesday that has the potential for violent winds and rain, but it will have little appreciable effect on currently moderate temperatures until Wednesday, when it will drop highs into the 50s and 60s across much of the region.

Meanwhile, Northeast weather was even milder Monday than on Friday, said a producer who trades the Northeast market. Temperatures look to stay fairly mild (people may need a sweater in the morning but it’s shirtsleeve conditions in afternoon, he said) until around Thursday then readings will be dropping.

The producer noted that many of the Gulf Coast points that saw big gains Monday, particularly in South Texas and East Texas, don’t trade a lot of volume any more, so their volatility was skewed a bit by illiquidity. He observed that cash trading got started later than usual Monday while the screen was up early, so futures had a little more same-day influence on the physical market than usual.

There’s no room left in storage, and shippers have a lot of positive pipeline imbalances from last week to work off, so it might not be until next week that colder weather is able to sustain an overall cash market rebound, the producer commented. He also noted that Henry Hub remained nearly $2.50 behind the screen, even with the December futures decline of 10.5 cents exceeding the Hub’s drop of 2-3 cents.

“Everybody’s waiting on some weather,” said a Rockies producer. The West had a bit more heating load coming online after the weekend, which along with the lifting of its OFO by SoCalGas helped western points rally. But he added that afternoon highs in the upper 40s in the western Rockies represented fairly moderate conditions for mid-November, so the market still doesn’t have the sustained severe cold needed for a really substantial rally from Friday’s major softness. However, he reported that the Denver area was expected to be around freezing Tuesday.

If anyone needed a reminder that there’s still a couple of weeks left in the 2005 Atlantic hurricane season, they got one with the formation of Tropical Depression 27 Sunday in the Windward Islands (the southern half of the Lesser Antilles chain between Puerto Rico and Venezuela). The depression remained disorganized over the eastern Caribbean Sea, the National Hurricane Center said in a Monday afternoon update (see futures story). TD27 would be christened as Tropical Storm Gamma (third letter of the Greek alphabet) if it reaches that stage. It appears to be little threat to the U.S. offshore production area, being on a westward course that would have it approaching the coast of Honduras during the weekend.

The recovery of Gulf of Mexico shut-ins picked up a little more steam over the weekend. After reporting a minuscule gain of 17.02 MMcf/d last Thursday and not issuing an update Friday due to observance of the Veterans Day holiday, Minerals Management Service (MMS) said it counted 3,742.03 MMcf/d in remaining outages Monday. That represented a drop of 273.47 MMcf/d since Thursday (see related story).

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