Cash prices on average for weekend and Monday delivery gas gained 3 cents in Friday’s trading. Weather-driven weakness was noted at eastern points, but that was more than offset by strength in the Gulf of Mexico and Rockies. Futures trading was uninspired, and at the end of the day November had risen 0.7 cent to $3.611 and December had eased 2.3 cents to $3.877. November crude oil lost 21 cents to $91.86/bbl.

Florida traders are perplexed by the high basis Florida Gas Transmission Zone 3 (FGT Z3) enjoys relative to the Henry Hub. At present spot FGT Z3 is perched a stout 32 cents higher than Henry Hub, and traders are hard pressed to figure out why.

“I really thought this month it was going to come down, but obviously I was wrong,” said a Florida utility buyer. “If anything, it has continued higher. [Friday] Zone 3 traded almost 40 cents over the Hub. Our loads are down, and I’m not being affected by it too much, but the little bit I am buying is very expensive right now.”

The buyer was not optimistic that the price differential would contract any time soon. “On trading platforms that trade basis, the basis has gone up about 200% just in the last week. FGT Z3 to the Hub went from about 9 cents to about 20 cents. That’s very unusual for this time of year,” he said. “Normally in the summer you anticipate the basis being high and in the winter you expect it to be lower. Last year it was about 2 cents.”

Quotes for weekend and Monday delivery to FGT Z3 actually eased 5 cents to $3.70, and Henry Hub came in 10 cents higher at $3.38. Columbia Gulf Mainline added 2 cents to $3.27, and ANR SE added a couple of pennies as well to $3.27. Deliveries on Tennessee 500 L were up 6 cents to $3.37, and Transco Zone 3 came in at $3.31, up 4 cents.

Although temperatures at eastern points were forecast to plunge Friday, a warming trend over the weekend ensured low loads going into Monday.

“A strong cold front will plunge south through the northern Plains and Upper Midwest today [Friday], eventually clearing the Great Lakes, Ohio Valley and interior Northeast,” said AccuWeather.com meteorologist Bill Deger. “While it may be the third cold front in the past week for most areas, this one certainly looks to be the strongest. A spell of milder air can be expected this weekend through next week, putting the kibosh on the threat for more snow and freezing temperatures for the time being.”

According to AccuWeather.com, a chilly high Friday in Boston of 54 should rise to 73 on Monday. The normal high in Boston is 63 at this time of year. New York City’s Friday high of just 53 was predicted to advance to 70 on Sunday and 73 on Monday. New York’s typical high is 65 at this time of year.

Quotes at Algonquin Citygate tumbled 26 cents to average $3.74, and gas into Iroquois Waddington slid 17 cents to $3.81. At Tennessee Zone 6 200 L weekend, and Monday gas skidded 38 cents to $3.73.

On Dominion weekend and Monday gas averaged $3.40 or about 9 cents higher, and at Tetco M-3 gas shed 5 cents to $3.46. On Transco Zone 6 gas destined for New York fell 6 cents to $3.46.

Rockies prices were strong. Weekend and Monday deliveries on CIG Mainline gained 8 cents to $3.30, and at Opal prices rose 11 cents to $3.47. On Northwest Pipeline Wyoming prices added 5 cents to $3.40.

Although Friday’s futures trading was lackluster, one trader said, “it feels like we are going to test some higher numbers [this] week.” He sensed that there was some pent-up buying interest and that “prices might test between $3.65 and $3.75.”

Analysts contend that the shrinking supply surplus continues to drive the market, and the surplus itself is looking less daunting as traders price in a colder winter than last year. “While it would appear that supply could still exceed last year when the seasonal peak develops next month, the market appears to be looking beyond November and toward year’s end when a year over year deficit is likely to be seen,” said Jim Ritterbusch of Ritterbusch and Associates.

“At the same time, the market is forced to price in normal temperature patterns during the early portions of the winter, an assumption that varies considerably from last year’s unusual warmth. So although supply would appear available to meet even the strongest demand of winter requirements, the large supply surplus that had been widely assumed just a couple of months ago now is now looking much smaller with each passing week,” he said in a morning note to clients.

Near-term weather forecasts are mostly temperate, and forecasters are having some difficulty interpreting their various weather models. Commodity Weather Group in its six- to 10-day outlook shows a ridge of above-normal temperatures centered over Four Corners and extending to the Mississippi Valley. Uppermost New England is also expected to be above normal.

“For the six-10 day, the latest models generally agree that a cool trough following a storm system offers some modest cooling to the Midwest, East and South next week,” said Matt Rogers, president of the firm. “This trends that period cooler overall for many areas, while the interior West and California stay warm or go a bit warmer overall until some late six-10 day cooling slides down the West Coast. The 11-15 day continues to be a tough challenge as the models grapple with a large cool air mass in western Canada and along the Northern U.S. tier. That air could make a stronger push toward the Midwest, South and East at any time. We continue to favor a cautious route with a blend of the typically more skillful American and European ensembles.”

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