Most of the cash market saw higher prices Monday, including a lot of double-digit gains, driven by forecasts of colder weather later this week in much of the U.S. and Canada and Friday’s 30.1-cent advance by December futures. The return of industrial load from its typical weekend decline also provided some support for cash quotes.

The West, Texas and Midcontinent tended to see most of the largest increases as most points ranged from flat to nearly a dollar higher. The Southern California border recorded the day’s top increase as inland California areas will have lows falling into the 40s Tuesday. The PG&E citygate rang up a more sedate uptick of nearly 30 cents. Both PG&E and SoCalGas allowed weekend high-linepack OFOs to expire.

Northeast and Midwest citygates took most of the losses ranging from 2-3 cents to a little more than 45 cents. Both market areas will have a mass of arctic air starting to move in accompanied by a light amount of frozen precipitation, but Tuesday’s predicted lows will fail to get below the 40s in many cases.

Both the South and Midcontinent are fairly comfortable for right now with highs in the 70s expected Tuesday, but they will also get a taste of wintry weather after the blast of cold from Canada moves through the Midwest and Northeast.

A Midcontinent producer said he wasn’t sure why the production area was so strong in comparison to Midwest citygates. After all, in many cases Midcontinent prices were still more than a dollar below index while Chicago is only about half a dollar below index and the two Michigan citygates are actually at small premiums to index, he said. However, he suspected that Midcontinent traders may have wanted to get in long supply positions in advance of regional temperatures that are forecast to fall into the mid to high 20s Thursday through Saturday.

The spread between Northern Natural’s demarc and Ventura points, which had ballooned to $1.21 Friday, contracted a great deal Monday as demarc soared nearly 60 cents while Ventura was up only a couple of pennies or so. Ventura still commanded a stiff premium of about 65 cents over demarc pricing, however.

The Rockies continued their strong rebound from Friday as significant heating load had built up in the area. Denver was expected to see Monday’s low in the mid 30s drop to just under 20 degrees Tuesday, while the forecast for Cheyenne, WY, called for a low of 9 Tuesday. Rockies quotes (and the West in general) also got a lift from El Paso and CIG ending Strained Operating Conditions (see Transportation Notes).

The trading representative for some Gulf Coast independent producers thought it was “way too warm in most areas” for such a strong market to begin the week. After all, she noted, the coldest weather is due to arrive during the holiday weekend when a lot of businesses will be closed or at reduced activity levels, and the holiday will ensure more weekend loss of load than usual.

Despite the developing cold snap, the trader said she expects cash prices “to fall hard” through the next two days. She doesn’t expect another rally until after the weekend.

She said her company is having to do more balancing work than usual because many pipelines have high pressures due to shipper banking of gas and essentially full storage facilities.

A western marketer noted that the market was very quiet Monday but added that “you’d expect that during Thanksgiving week.” Despite Nymex being open for floor trading Friday, spot gas will trade Wednesday for flows through the following Monday, he said.

Looking ahead to bidweek, the marketer perceived utilities as wanting to get most of their December business done early at index but said the suppliers are reluctant to go along. He said he knew of people wanting to sell El Paso-San Juan gas for December at index plus 3 cents but didn’t think any deals got done there “because the market was set by ICE and brokers at index flat to plus half a cent.” He said he tried to split the difference and sell a San Juan package at index plus 0.25 cent but didn’t get any takers. “It seems like everybody is well entrenched on both sides” (buyers and sellers), he said.

Ron Denhardt of Strategic Energy & Economic Research believes the industry put back a little more gas than it took out of storage last week. He looks for the Energy Information Administration to estimate a 3 Bcf injection for the week ending Nov. 19. The report will be released Wednesday this week because of the Thanksgiving holiday.

The number of drilling rigs searching for natural gas in the U.S. fell by four in the week ending Nov. 16, according to the Baker Hughes Rotary Rig Count (https://intelligencepress.com/features/bakerhughes/). Rigs working in the Gulf of Mexico rose by five, Baker Hughes said, but the onshore count fell by nine. The new tally of 1,455 rigs was up 1% from a month ago and 4% higher than the year-earlier level.

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