The downtrend continued Monday morning at the majority of points, with many places down a more than a dime from Friday averages. However, there was a late turnaround in some regions, including West Texas, the Midcontinent, Gulf Coast and Northeast markets, which may set the tone for trading Tuesday and Wednesday until the AGA storage report is released. Despite plenty of time to prepare last week, the colder weather appears to have caught some players off guard.

“I think this cool weather is going to be a little more than what people bargained for, and that puts them on the market to buy,” said one marketer, noting a National Weather Service forecast for below normal temperatures across the entire midsection of the country. “I don’t think prices will fall much more from here, but whether they can climb a lot will depend on how cold it gets. In October and in April if you get unexpected cold weather you can get some pretty good spikes in cash. They shouldn’t be taking gas out of storage yet. They should be out here buying this month, if you look at what value is next month,” he added.

A Midwestern trader said he thought there were quite a few players net short this month. “I think most people at the beginning of the month expected prices to get pummeled, so there are some folks out there in the Midcontinent picking up some late swing gas,” he said.

Midcontinent prices fell sharply from Friday levels initially, but firmed late. Despite falling off early into the low $1.70s where the bulk of trading took place, West Texas prices rebounded back into the mid-$1.80s. Katy prices were fairly strong as well. “If you get Waha-to-Katy at about 8 cents or more, buyers usually come out and transport that gas. We ran a differential today of probably 13-14 cents most of the morning,” the marketer said. Midcontinent was holding up above Waha.

The early declines were sharp out West. The Southern California border “got hammered,” starting around $2.00 and falling to the low $1.80s, said the marketer. “We even had some people out there who have a lot of transport buy a large package from us at Waha, and by the end of the day they gave us some gas back, because they could buy the border so much cheaper and we could sell it at Waha at higher prices. We sold them gas at $1.77, and they gave us some back, and we sold it late at $1.85.”

Prices opened in the low $1.60s in the San Juan Basin and ended down at least a dime from Friday’s levels. “It’s finally cooled off here in the Southwest, so our burn has gone way down,” said one power generator. “I know that’s true for the other generators and utilities out here and in California. It’s supposed to be mild throughout the week.”

PG&E Citygate traded in a wide 20-cent range, from the low $1.80s to the low $2.00s, according to one marketer. Temperatures are mild in Northern California, and PG&E called a systemwide operational flow order due to high pipeline inventories on Saturday. “Price came out kind of high, but ran down much of the day, the marketer said. “However, there was a late blip and prices popped back up at the end. With the Nymex running up a bit late, I think cash prices kind of followed.”

The yo-yo affect was slightly more pronounced in the Gulf Coast and Northeast, said one LDC. Station 65 fell to $2.06 from $2.12 ($2.17 on Friday), but posted highs in the low $2.20s. Transco Zone 6 New York fell to $2.35 but ended in the high $2.40s, he said. “Prices went up late, but not too far. Iroquois Zone 2 was a couple pennies above NY.

“We didn’t go very long this month in case the weather got too warm,” he added. “Storage is pretty full going into October. It makes it difficult to plan. We were on the cautious side this month, so we are having to buy a little spot now.”

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