Cool to cold temperatures were due over the weekend in most areas, but the cash market did not find that enough incentive to sustain Thursday’s sharp gains into Friday. Instead, prices fell at almost all points between a little less than a nickel and nearly half a dollar (the sole gainer was Transco Zone 5’s rise of about 4 cents).

The previous day’s screen drop of a little less than a nickel, a moderately bearish storage report and the usual weekend slump in industrial load all played a part in pushing quotes down. One source said that although the report of a 67 Bcf storage injection during the previous week was within the range of prior expectations, it was considered bearish both because the volume beat the five-year average refill of 56 Bcf and traders realized that if the report hadn’t included a reclassification of 7 Bcf from working gas to base gas, the addition to already bulging inventories would have been even bigger.

Even if only briefly, $55/bbl crude oil became reality. The November crude futures contract established the new intraday record Friday before retreating slightly to close at $54.93, up 17 cents. Heating oil was flat from Thursday’s all-time peak, but concern remained high about winter supplies after the government’s report Thursday of a decline in the stockpile of distillates, which includes heating oil. Natural gas futures once again separated from the crude oil trend by falling 9.4 cents.

Even though temperatures were expected to fall further Saturday in the Chicago area, a Calgary-based producer explained the citygate’s decline of about 30 cents as due to an estimated 150 MMcf/d getting added into the Chicago market because Alliance finished maintenance that had been cutting its deliveries by that amount last week. Also, Chicagoland is particularly susceptible to industrial load losses over a weekend, he said.

The producer added that the Calgary area might get some snow over the weekend, but Friday was merely chilly with temperatures in the low to mid 40s. He said he’s not worried about the potential price-devastating effects of storage filling up before the traditional withdrawal season begins Nov. 1. “We’ll muddle our way through it” the way the market always has, he said.

Traders in the California market got a break when PG&E ended a three-day high-linepack OFO, but SoCalGas initiated an OFO of its own for Saturday (see Transportation Notes). The actions resulted in another big north-south price split: the PG&E citygate fell slightly under a dime, while the Southern California border plunged more than 45 cents.

The process of restoring shut-in Gulf of Mexico production resumed gaining ground as Minerals Management Service said 1,699.35 MMcf/d remained offline Friday, according to reports from 19 companies. But that was only a little more than 6.5 MMcf/d less than Thursday’s unchanged count.

©Copyright 2004 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.