The cash market was approximately evenly divided between higher and lower points Friday, but taking into account the losses being much larger than the gains, it was definitely an overall down day.

Forecasts of a cold weekend in much of the East had quotes rising in the Midwest, Northeast and most of the Gulf Coast. But as a source had predicted, modest screen weakness a day earlier and the usual drop of industrial load kept the gains fairly modest. They ranged from 2-3 cents to about a quarter, with an occasional flat point in the mix.

Several Gulf Coast points, mostly in Texas, joined the Midcontinent and most of the West in numbers that were down a little less than a nickel to nearly 75 cents.

The Energy Information Administration (EIA) greatly exceeded consensus expectations in the mid 40s Bcf when it reported a 62 Bcf addition to storage in the week ending Nov. 7. Nymex traders had a predictably bearish initial reaction as they took December futures to their daily low of $6.054 soon after the report. However, the contract later rebounded to close at $6.312, down only six-tenths of a cent from Thursday (see related story). The EIA report was delayed until Friday morning last week because of the Veterans Day holiday Tuesday.

The Midwest could expect freezing lows Saturday, but more moderate conditions would prevail in the Northeast that day before a snow-bearing cold front arrived Sunday. Low temperatures in the 30s were predicted for the South, but no freezes.

Most of the West was already enjoying fairly moderate weather, and the Rockies was due to begin a warming trend Saturday, although temperatures would still be chilly. Denver’s low was forecast to go from around 20 Friday to the 37 area Saturday.

Excess supply issues had been subsiding in the West last week but were cropping up again Friday. SoCalGas issued a high-linepack OFO and PG&E extended Friday’s high-inventory OFO through Saturday. CIG declared a Strained Operating Condition (SOC) due to relatively mild weather in its service area and high storage levels. And Northwest declared a General Entitlement for Underruns for receiving parties north of the Kemmerer (WY) Compressor Station, citing “very high” linepack at its northern end, full Jackson Prairie storage and recent customer banking on its system north of Kemmerer (see Transportation Notes).

In addition, CIG affiliate El Paso said it had set the probability of declaring an SOC or Critical Operating Condition to high due to high linepack. And Westcoast was forecasting that already-high linepack would be going even higher.

A Midwestern utility buyer acknowledged that it would be colder than normal in his area over the weekend, “but not even close to what we can expect later in the winter.” He said his company expected to have its biggest gas throughput of the current cold spell Saturday, then have volumes tapering off a bit after that. It will continue to have high demand for a while, though, as temperatures will stay cold through this week, he said.

The buyer said the utility was lucky to be in a position to buy nearly all of its supplies at Northern Natural-demarc, where it could take advantage of the often “huge” discount to the pipeline’s Ventura trading point, which is closer to the main population centers of the Midwest. But on the coldest days of the winter the utility reaches its demarc limit and has to buy some gas at pricier Ventura, he said.

The combination of a demarc increase and Ventura decline Thursday had cut the Ventura premium to $1.60, but both points reversed price direction Friday, pushing Ventura to nearly $2.15 above demarc.

SunTrust Robinson Humphrey/the Gerdes Group analysts said the next storage report should reflect the first net withdrawal of the heating season, “though it will likely be fairly minor. The last two weeks in November, however, are likely to experience above-average withdrawals given the expectation of colder-than- normal temperatures across the eastern half of the country.”

It’s becoming much more apparent that the increase of 23 drilling rigs actively seeking natural gas in the U.S. during the week ending Oct. 31 was an anomaly. After the count resumed a falling trend with a decrease of 13 rigs in the week ending Nov. 7 (see Daily GPI, Nov. 11), the Baker Hughes Rotary Rig Count (https://intelligencepress.com/features/bakerhughes/) reported a plunge of 41 active rigs to 1,498 for the week ending Nov. 14. One was added in the Gulf of Mexico, but 42 rigs quit the search onshore, Baker Hughes said. Its latest count is 3% lower than a month ago but 3% above the year-earlier level.

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