Apparently any "storm hype," which seemed to help buoy the market earlier in the week, was getting totally dismissed as prices sank at all but one point Friday, most often by double-digit amounts. Instead, the near-imminent diminution of most remaining cooling load and the weekend factor of considerably lower industrial demand were more persuasive to traders in sending cash prices lower.
The previous day's 5.3-cent climb by October futures following a slightly bullish storage injection report obviously had essentially no positive impact on cash numbers. Negative screen guidance will remain in effect for Monday after the prompt-month contract began its three-day countdown to expiration with a loss of 13.8 cents (see related story).
The Florida citygate, where Florida Gas Transmission had issued an Overage Alert Day (see Transportation Notes), was the sole exception to the overall market trend in rising about a dime. Otherwise, losses ranged from about a nickel to 30 cents or so. The Rockies, Southwest and California recorded most of the declines of less than a dime.
Tropical Storm Matthew appeared to be bent on a course into the mountainous terrain of Honduras and then Belize before entering Mexico's Yucatan Peninsula. Such a tracking would render it significantly weaker if Matthew makes an unlikely northward turn into the western Gulf of Mexico. Tropical Storm Lisa was strengthening Friday, the National Hurricane Center said, but its northward tracking while still in the eastern Atlantic would keep it far from North America.
Even though fall officially began Wednesday with several areas still experiencing summer-like conditions, those conditions will largely be a thing of the past when traders return to their desks Monday. An eastward-moving cold front that stretched southwestward from Eastern Canada into Texas Friday probably wouldn't erase the memories of summer heat for many people but likely would increase their comfort level quite a bit. Even Texas was not expected to surpass the 90-degree level Saturday, according to Madison, WI-based Weather Central.
The Northeast's brief flirtation with warm weather was ending quickly as highs were due to retreat into the 70s and low to mid 80s Saturday. The status quo of mild to cool temperatures remained in place in nearly all other areas.
The Chicago citygate officially began bidweek trading at $3.96 on the IntercontinentalExchange (ICE) platform, or about 20 cents above NGI's September index of $3.77. Similarly, ICE found the Houston Ship Channel's initial October pricing at just under $3.92, or a little more than 20 cents higher than the $3.70 September index.
As far as a Gulf Coast producer was concerned, the end of last week pretty much was the last hurrah of summer weather for most areas. Even his home state of Texas will be sinking into the 80s during the coming week, he noted. He considered it a "done deal" that cash prices will be mostly flat to slightly softer over the near term; at this point he didn't see anything that would reverse that assessment.
The producer said he was doing a small amount of October baseload business Friday, with basis deals into Dominion at plus 7 cents and into Columbia Gulf at minus 7.5 cents. He also reported trading Texas Eastern-South Texas at index plus 1.5 cents.
Tradition Energy analyst Addison A. Armstrong noted that Thursday's report of a 73 Bcf storage injection for the week ending Sept. 17 marked the second consecutive build that was above both last year's and the five-year average weekly injection. "If storage injections match the five-year average of 51 Bcf for the remaining six weeks of this year's injection season, then the total storage level will reach only 3.645 Tcf...and fall short of last year's record storage level of 3.837 Tcf by 192 Bcf," he said.
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