Although heating load remains fairly strong across Canada and most of the northern half of the U.S. (and to some extent in parts of the South), the 29.2-cent downturn by November futures a day earlier had its expected effect of dragging most cash prices lower Wednesday.

Several flat to about a nickel higher points were scattered throughout the market but tended to be most prevalent in the Midwest and Northeast. A Florida citygate plunge of about $1.20 to the upper $4.30s caused that location to yield its previous king of the price hill status to several Northeast citygates and the PG&E citygate. Otherwise, losses were considerably more moderate in ranging from 2-3 cents to nearly a quarter.

Cash traders will continue to have negative futures guidance Thursday after the prompt-month contract fell another 15.2 cents (see related story).

The Pacific Northwest is a bit warmer than the rest of the northern U.S. and Canada, but lows are expected to keep reaching the 30s (or occasionally 20s) in most of that overall area. The forecast of a mid 90s high Thursday in Phoenix indicates that temperatures are creeping higher again in the desert Southwest.

Through Thursday the South will see considerable temperatures variations. A cold front was due to take lows in such locations as Little Rock, AR, Memphis, TN, and Atlanta into the mid 40s to low 50s. However, farther south conditions will remain much warmer Thursday, with Houston, New Orleans and much of Florida due to peak on either side of 90. However, cool temperatures will reign throughout the region Friday, The Weather Channel said, as the cold front “will be draped from the Florida peninsula to far South Texas with scattered showers and storms in both locations.”

Southern Natural Gas, which had recorded storage levels as high as 97% as recently as Oct. 1 in its two facilities in Louisiana and Mississippi, is seeing some relief from recent cool weather in the South. Out of total working gas capacity of 60.0 Bcf, Southern said that as of last Thursday its inventory was 57.2 Bcf, or 95% of capacity. That compares to volumes of 51.9 Bcf (86%) on Oct. 9, 2008 and 55.1 Bcf (92%) on Oct. 11, 2007, Southern said.

It’s looking more and more likely that the industry will get through 2009 with no tropical storm/hurricane disruptions of offshore production. The Atlantic hurricane season is officially from June 1 to Nov. 30. There is nothing magical in these dates, the National Hurricane Service said, and hurricanes have occurred outside of those six months, but the dates were selected to encompass more than 90% of tropical activity. June 1 has been the traditional start of the Atlantic season for decades, the agency said, but the end date has been slowly shifted outward from Oct. 31 to Nov. 15 until its current date of Nov. 30.

A Rockies producer said he is “not really surprised” to see his market area trade at approximate parity or premiums to Henry Hub, especially when western locations such as PG&E citygate remain above $5. California’s historic supply sources such as Rockies, Western Canada and Southwest are in production declines, he noted. Meanwhile, the shale plays “are just overwhelming” Gulf Coast supply, he said; also, in the current poor economy the Gulf Coast’s plethora of refineries and petrochemical plants aren’t using as much gas as they formerly did. Henry Hub is now in one of worst supply positions, he commented.

It’s still chilly but not quite as cold in the Rockies as it was last week, the producer went on. He noted that the post-test reopening of the Clay Basin storage facility Friday will provide a small extra placement option for Rockies gas. Clay Basin is nearly full, he said, but still has about 3 Bcf or so of space left for injections.

A utility buyer in the South said his company will begin assessing its winter supply strategy Thursday. It has seen a “little pickup” in heating load this week, he said, but no more than about 5,000 MMBtu/d that could be directly attributed to cooler weather. However, it can expect significantly colder conditions this weekend as a cold front continues its penetration of the South, the buyer added.

The utility is still buying a little spot gas for topping off storage, he said. It hasn’t needed to take any gas out of storage in recent weeks, but plans to start drawing about 16,000-17,000 MMBtu/d during November, he continued. The company may not need that much from storage to keep up with weather-related demand, he said, but it can’t wait around indefinitely to start withdrawals because of pipeline requirements for specified maximum inventories by the end of withdrawal season next spring.

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