With markets still a little off kilter after Hurricane Sandy left a path of destruction Monday, natural gas cash quotes averaged 4 cents higher Tuesday for Wednesday delivery with double-digit gains at Midwest and Rockies points offsetting flat Gulf quotes and a number of declines in the Northeast. At the close of trading December futures had slipped 11.2 cents to $3.691 and January was 10.8 cents lower at $3.824. December crude oil was 14 cents higher at $85.68/bbl.

Great Lakes marketers were buying gas to meet heating needs. “I don’t know if this is normal, but we had snow this morning and high winds,” said a Michigan marketer. “We’ve been inquiring about buying more baseload gas for November because it looks like there is some out there. We paid $3.85 for what we are flowing Wednesday on Consumers, and we were hearing that there was leftover baseload for November at $3.70. Apparently, it’s possible to buy November baseload gas and flow it in October.

“The only impact we have seen from Sandy is the snow we saw and the forecasts for continued moisture, but there were some power losses in eastern Michigan and probably some demand destruction.”

Quotes on Michcon for Wednesday deliveries gained 7 cents to $3.86, and deliveries on Consumers rose 6 cents to $3.85. Parcels on Alliance were seen 10 cents higher at $3.96, and at Dawn Wednesday gas was up 7 cents at $3.97. At the Chicago Citygate weather-driven demand lifted prices a stout 15 cents to $4.00.

The Great Lakes may have had modest market impacts from Hurricane Sandy, but the region was on the backside of a 1,000-mile-wide circulation pattern and the weather was brutal. Tom Skilling, a meteorologist at Chicago Weather Center, in a Tweet said, “waves as high as 20.3 ft. observed Tuesday morning at the NOAA mid-lake buoy east of Kenosha.”

For the moment, Chicago is in the midst of a cold snap. Skilling forecasts a Wednesday high of 48, 7 degrees below normal and a low of 30 with “North-northwest winds occasionally 15-25 mph gusting to 30 mph.”

Nuclear plants within Sandy’s reach came out unscathed. Entergy Corp. of New Orleans reported that its Indian Point and Fitzpatrick nuclear power plants in New York as well as the Pilgrim plant in Massachusetts and Vermont Yankee all safely weathered the storm.

“Nuclear plants are built to exceed the most severe natural forces historically reported for their geographic area,” said John Herron, president of Entergy Nuclear. “And we saw evidence of that again with Hurricane Sandy.”

Gulf points were mixed. Quotes at Henry were up 2 cents at $3.42, and on Tennessee 500 L Wednesday gas fell 3 cents to $3.42. On ANR SE next-day deliveries were up a cent at $3.40.

In the Rockies, prices scored double-digit gains. At CIG buyers of Wednesday gas had to pay 11 cents more at $3.48, and Opal quotes were 13 cents higher at $3.52. On Northwest Pipeline Wyoming next-day deliveries were a stout 15 cents higher at $3.52.

Technicians see the December contract under stress. “Ideally, if the trend is still up natgas should be able to carve out a bottom from the $3.620-3.603 area. However, still peg $3.461 as the lowest level consistent with any bull market correction. As long as natgas can turn higher in front of this level, we will have a case for a push to $4.223. Fail to carve out a bottom, and we will have a confirmed top in place. [We] suggest sell stops below $3.405,” a New York analyst said.

Analysts utilizing Elliott Wave and Retracement analysis suggest that the market has or is close to putting in a top. “Since July, our head and shoulders target has been $3.600,” said Walter Zimmermann, vice president of United ICAP. “From late August our A = C = E target has been $3.558 [and] the weekly candlestick is now a bearish peaking pattern from a $3.648 high.”

November futures traded as high as $3.648 during the fourth week of October.

There is the possibility of further gains, but “while we still cannot rule out another leg up to the $3.950 to 4.200 area cited in last week’s report, [we] suggest remaining length place protective sell stops below $3.230 [basis November],” he said in a weekend note to clients.

Tom Saal of INTL Hencorp Futures in his work with Market Profile sees a likelihood of lower prices as well. He sees the December contract testing Monday’s value areas at $3.837 to $3.797, followed by a second at $3.740 to $3.708, and eventually a third at $3.585 to $3.547. “Typically, value areas are filled the next day,” he said.

Forecasters looking beyond the impact of Hurricane Sandy see mainly warmer temperatures out west and a cluster of below-normal readings centered around southern New York to North Carolina and as far west as Ohio. MDA Information Systems in its six- to 10-day outlook said, “This period has turned a bit warmer in the West to include more widespread aboves and much-aboves [normal temperatures]. While the Northeast has also been tweaked slightly cooler, the large-scale themes remain quite similar to [Monday]. Models are largely in good agreement on the big picture here, though they remain much more variable in the details.

“A weak storm system is likely to sneak off the Mid-Atlantic coast early on, with a renewed round of weak cooling arriving in its wake. The Western warmth is likely to be strongest through mid-period before fading some as a cool trough moves in from the Northwest.”

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