The overall cash market outdistanced the volatile futures market and added 7 cents on average Thursday. Particular strength was noted at Midcontinent points as cold temperatures raced into the nation’s midsection. Eastern and Gulf prices were also firm.

The Energy Information Administration (EIA) reported a storage build of 77 Bcf, and prices momentarily swooned but managed to climb back into positive territory. At the close November had risen 1.1 cents to $3.406 and December had added 1.7 cents to $3.680. November crude oil bounced back from Wednesday’s plunge and added $3.57 to $91.71/bbl.

Gulf buyers were perplexed at recent market strength and shifting basis. “Florida Gas has completed all their maintenance and there are no more allocations,” said a Florida utility buyer. “Our loads are consistent and maybe even a little low from last summer to this summer, and I don’t know why prices are so high. I would guess that the higher screen prices have something to do with it. It’s really unnecessary for prices to be this high.”

He added that the basis between their market point and Henry Hub has been out of whack for “a very long time. It’s been anywhere between 20 and 40 cents and that all started with the allocations on the pipeline with the Zone 3 pool back in the spring, and it never has shrunk back down. That elevates everything. It could get even stronger during the winter if there is lots of load,” he said.

Gulf prices were strong. Quotes at Florida Gas Transmission Zone 3 averaged $3.66, up 6 cents, and ANR SE came in at $3.22, a gain of 6 cents. Columbia Gulf Mainline Friday deliveries rose 6 cents to $3.21. Henry Hub was quoted 2 cents higher at $3.23, and Friday gas on Tetco E LA was 3 cents higher at $3.22. Tennessee 500 L rose 8 cents to $3.29, and Transco Zone 3 gained 4 cents to $3.26.

Eastern and Northeast prices were firm as near-term temperatures remain elevated and were not expected to cool until the weekend. A broad mass of cold air has worked its way into the interior of the country. “The change to chilly will not be as dramatic when it reaches the East Coast, but it will certainly be noticed. Temperatures will be well up in the 70s in Boston tomorrow… and near 80 degrees in Philadelphia and Washington, D.C. On Sunday, temperatures in those cities will be in the 40s and 50s,” reported AccuWeather.com meteorologist Elliot Abrams on his blog.

The high Thursday in New Haven, CT, of 71 was expected to rise to 76 on Friday, well above the seasonal high of 68. Philadelphia’s Thursday high of 80 was forecast to reach 82 Friday, 11 degrees higher than the seasonal average, according to AccuWeather.com.

Friday quotes on gas bound for Algonquin Citygate added 4 cents to average $3.63, and deliveries to Iroquois Waddington eased a penny to $3.65. On Tennessee Zone 6 200 L next-day deliveries rose 7 cents to $3.63.

On Dominion Friday parcels averaged $3.22, up 3 cents, and buyers on Tetco M-3 saw their quotes rise 6 cents to $3.48. Gas on Transco Zone 6 New York was higher by a nickel at $3.47.

That cold air mass had residents of Oklahoma, Kansas and North Texas flipping on their furnaces Thursday and gas prices throughout the area posted double digit gains.

“A sudden change with colder air and brisk conditions will shock residents of the southern Plains and Texas into this weekend, making it feel like winter has arrived,” said AccuWeather.com meteorologist Meghan Evans. “A cold front, referred to as a blue norther, will sag southward, ushering the chilly air across the southern Plains on Friday and northern Texas on Saturday. Highs will drop 20-30 degrees behind the front with breezy conditions adding to the chill. The cold front is associated with a storm that unleashed the first snow of the season in portions of North Dakota and Minnesota. Following a high in the 70s in Oklahoma City on Thursday, the temperature will climb into only the upper 50s on Friday.”

Gas on ANR SW for delivery Friday surged 12 cents to average $3.17, and deliveries to the NGPL Mid Continent Pool added a dime to $3.21. Oklahoma Gas Transmission next-day deliveries posted a 10-cent advance to $3.13. Panhandle Eastern gas for Friday jumped 14 cents to $3.14.

With only four weeks left to go in the traditional storage injection season, ending inventories came into sharper focus. The EIA predicts ending inventories of 3,850 Bcf at the end of October and a peak intra-month fill of 3,916 Bcf in November. Present stocks are 3,653 Bcf, thus to get to 3,916 only 66 Bcf a week is necessary for the remaining four weeks.

Tim Evans of Citi Futures Perspective was one analyst who thought the report would fall short of that weekly requirement. He predicted just a 55 Bcf increase, but a Reuters survey of 28 traders showed a 71 Bcf average with a sample range of 57-81 Bcf. A similar Bloomberg survey came up with a 73 Bcf average, and Bentek Energy predicted a 76 Bcf build. Last year, 101 Bcf was injected, and the five-year average stands at a 78 Bcf increase.

The folks at Energy Metro Desk in their weekly survey found a wide range of estimates and said “more than half of the analysts who wrote in to us this week noted that scrape models for the report week did some pretty crazy things, a roller coaster ride apparently. That said, we reckon the EIA may be delivering us a surprise this week. One never knows. We agree with Bentek’s assessment…risk may be to the low side of its forecast.”

The report came on the heels of Wednesday’s free-fall, and traders suggested that the market might be vulnerable to more downside. A New York floor trader said, “we are expecting an inventory build [Thursday] of 71-73 Bcf, and that may play on this market correction as well. If it comes in at 77 Bcf, this market will sell off. Even a few Bcf either way will make this market move.”

November futures did plunge briefly to a low of the day of $3.360 following the release of the data, but by the closing bell the contract able to post a modest gain on the day.

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