When futures took a steep dive after cash trading had beencompleted Thursday, it didn’t take a rocket scientist to predictthat cash prices would be headed into the dumpster Friday. Sureenough, quotes for the weekend were way down. Most of the declineswere between 10 and 25 cents, but some in Appalachia and theNortheast reached the 40-50 cents range. The smaller drops tendedto be concentrated at western points.

As expected, the transition between months that occurs todaycreated a hodgepodge of deal periods. Most sources separated theirswing quotes between Saturday-Sunday and Monday-only, but othersreported deals covering Saturday through Monday, and a few evenmixed up deal durations over all three types.

In general, traders saw Monday prices running a little higherthan those for Saturday-Sunday, but that certainly wasn’t ahard-and-fast rule. Even within the same regional market, such asthe Gulf Coast, sources reported Monday numbers both higher andlower than those for the weekend. In one large aggregator’s case,Texas prices for Monday were down while Louisiana prices were up,but it also had a few backsliders among the Louisiana pipes.

“Prices were all over the place, but we like that kind ofvolatility,” said a Midwestern marketer. There seemed to be atrading standoff in the weekend market “and the buyers won,” hecontinued. “Suppliers didn’t want to sell at the lower prices buthad to place their gas somewhere. Until some seriously cold weathershows up in November, the buyers are in control.”

Prices were holding up better at Dawn, ON, than at Midwestcitygates because there is still room for storage injections at theDawn hub, the marketer added.

A western source reported indexing many weekend deals, saying,”A lot of people were scared because of Monday representing kind ofa disjointed trading period and wanted to take the easy way out.”

Virtually all sources agreed that the November aftermarket willbe a pure weather play. “If temperatures remain mild, then priceslikely will continue lower,” one said. “However, now that the’correction’ has taken place, prices are very susceptible to abounce if it cools down much.”

A marketer who considers the initial November downturn”justified” explained that although storage levels still lag thoseof a year ago, storage players might be more willing to withdrawgas sooner than usual, especially during November and December. Thereason, he believes, is that many of them were able to hedge theirpurchases over the past seven months, successfully sellingNovember-March gas at handsome wholesale prices. “Because favorableinjection spreads have allowed them to hedge, they are not forcedto wait for a 50-cent price spike to withdraw supplies,” heconcluded.

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