Natural gas for weekend and Halloween Monday delivery were short on thrills and chills on Friday as near-term temperature outlooks continued at well above seasonal levels, and power market pricing offered little incentive to make incremental purchases for power generation.

The NGI National Spot Gas Average fell 12 cents to $2.35, and only a few points made gains. Futures managed a small gain, and at the close December was higher by 3.7 cents to $3.105 and January had advanced 2.6 cents to $3.263. December crude oil fell $1.02 to $48.70/bbl.

Ongoing mild temperature forecasts and inventory levels on track to surpass last year’s record 4 Tcf are keeping market bulls on the sidelines for now. “Although this huge price plunge of the past couple of weeks has extended much further than we had anticipated, we still caution against attempts to pick a bottom given continued mild temperature forecasts that could soon be extending toward mid-November,” said Jim Ritterbusch of Ritterbusch and Associates in a morning note to clients.

“Weekend updates to these views will have a large impact on next week’s trade and as a result, shorts will likely be on the defensive in [Friday’s] trade while looking for reasons to accept profits. From a technical perspective, this market is now much oversold and due for a show of price support. We expect this support to develop at about the $2.95 level per the newly prompt December contract. While this would imply another round of fresh lows, we don’t expect significant downside follow-through.

“In other words, we don’t view sub-$3 December gas futures as sustainable and we will look for the first shift toward colder than normal temperature trends to spark a significant price upswing. Our initial attempt toward a bullish strategy will be to establish bull spreads such as long March 2017-short September 2017.”

The seeds for a significant price upswing may be being sown. Data shows declining production year-on-year. “With October nearing its close, Lower 48 production for the month is set to come in about 2.15 Bcf/d below last October,” said industry consultant Genscape in a report. “Spring Rock’s Daily Pipe Production estimate shows today’s estimate just over 71 Bcf/d, just a tick over the month-to-date estimate at 70.91 Bcf/d. October 2015 volumes averaged 73.0 Bcf/d.

“Every macro production region showed declines except the East (up 1.28 Bcf/d YOY) and New Mexico Permian (+0.03 Bcf/d YOY). The largest declines are in Texas (down -1.29 Bcf/d YOY), Midcon (-1.01 Bcf/d YOY), and Rockies (-0.53 Bcf/d YOY),” Genscape said.

In the physical market Midwest deliveries took a hit as temperature forecasts proved to be benign. forecast that Friday’s high of 66 in Chicago would rise to 71 Saturday before subsiding to 67 by Monday, 9 degrees above normal. New York City’s 49 high Friday was expected to reach 64 on Saturday, before subsiding to 54 Monday, 6 degrees below normal.

Gas on Alliance fell 21 cents to $2.52, and deliveries to the Chicago Citygate shed 16 cents to $2.57. Deliveries to Consumers fell 11 cents to $2.59, and gas on Michcon skidded 11 cents to $2.58.

Mid-Atlantic deliveries also weakened. Gas on Tetco M-3 Delivery fell 12 cents to $1.19, and gas bound for New York City on Transco Zone 6 fell 47 cents to $1.26.

Monday power prices were little changed. Intercontinental Exchange reported that on-peak Monday power at the Indiana Hub fell 13 cents to $33.50/MWh, and power delivered to PJM West rose 69 cents to $30.69/MWh.

Gas buyers having to make purchases for electric generation across the MISO footprint over the weekend should have plenty of renewables to work with. “Fair, breezy and warm weather is expected across much of the power pool during the next two days ahead of a frontal system along the Canadian border,” said WSI Corp. in a Friday morning report to clients. “A southwest flow ahead of a cold front will lead to a surge of anomalous warmth with max temps in the upper 60s, 70s to mid-80s. The aforementioned cold front will sag southward as the weekend progresses.

“The first frontal system will lead to period of strong wind generation [Friday] into tonight. Wind gen will decrease and become light by midday Sunday. The second frontal system will lead to another surge of strong wind gen during Sunday night through Monday. Output is forecast to peak 8-10+ GW with each spike of output.”