Battered by seasonal early-fall weather throughout nearly all of the market, further loss of storage injection capability and the weekend decline of industrial load, the cash market fell at all locations but one Friday.

A minuscule increase of a couple of pennies at Dracut, likely prompted by a three-day reduction of Sable Offshore Energy Project production starting Friday (see Daily GPI, Oct. 7), was the sole exception to declines ranging from about 2 cents to a little more than 35 cents, with a large majority of losses hitting double digits. Western markets were subject to most of the drops of about a quarter or more.

For a change none of the points in Tennessee’s Zones 4, 5 and 6 were either rising contrary to overall price weakness or exhibiting greater gains than the general market. In fact, despite a further increase of Line 300 takeaway capacity coming up soon, the line’s Zone 4 point saw one of the day’s largest drops and low-end quotes receded further to $1.10.

Although chances of another cash rally in the next week or so can’t be counted out, it’s unlikely to happen after November futures reversed Thursday’s small gain with a loss of 11.7 cents Friday (see related story).

The Weather Channel said warmer-than-normal weekend temperatures could be expected regionwide in the Midwest and in most of the South and interior Northeast. Cooler conditions were forecast in the West, but increases in heating demand were considered unlikely to be substantive.

Hurricane Philippe weakened enough to regress to a tropical storm again Friday afternoon and still appeared to have a lock on emulating many of its 2011 storm predecessors by staying out in the ocean well away from the East Coast as it headed into the colder waters of the North Atlantic.

Reflecting the growing tightness of available storage capacity, Southern, Columbia Gas and Southern Star Central all were implementing injection restrictions (see Transportation Notes).

And in a slightly different kind of development, NGPL said due to current operational conditions, customers under Rate Schedule DSS will not be required to fill their DSS accounts to 95% of the contract maximum storage volume in order to have 100% of the contract withdrawal quantity (WQ) available for the upcoming 2011-2012 withdrawal season. “For purposes of calculating a shipper’s WQ for the 2011-2012 withdrawal cycle,” NGPL said it will use 100% of the shipper’s contract maximum daily quantity.

A Rockies producer said Friday’s CIG-Henry Hub basis spread of about 55 cents likely was the biggest of the year. That wasn’t totally unexpected, though, since several pipes either have fall maintenance projects under way or scheduled for fairly soon.

“We’re screwed on the weather outlook,” the producer said, referring to the market’s overall softness and its greater impact on western prices. About the best chance he perceived for a near-term rally was further coal-to-gas switching by power generators.

Commenting on the rising rig count, he noted that there’s almost no weather, yet producers keep on pushing the drilling pace higher. However, he said, there may be some distortion in the count of gas-directed rigs, since many of the increases being reported are actually seeking natural gas liquids or oil in the shale gas plays like the Eagle Ford.

IntercontinentalExchange reported a big drop in Southern California border volumes traded on its platform, going from 790,000 MMBtu Thursday to 549,200 MMBtu Friday. The average border price recorded by NGI fell a little more than 35 cents.

The Baker Hughes Rotary Rig Count reported another hefty increase in gas-directed drilling for the week ending Oct. 7. Three units were activated in the Gulf of Mexico to accompany an addition of nine onshore, Baker Hughes said, bringing the latest total to 935. Although down 4% from year-earlier levels, the new count is up 5% from a month ago.

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