A large majority of trading locations were softer Tuesday as more seasonable fall temperatures return to most areas. Even the Midwest, where a cold front will be delivering considerably chillier conditions and snow in some sections at midweek, participated in the overall downturn.
Price drops ranged from as little as a couple of pennies to about a quarter, with most of them measured in double digits. The few points that were flat to about a dime higher were in the Northeast and Western Canada.
Though there may still be doubt about how long the revival of Marcellus Shale prices into Tennessee’s Line 300 in Zone 4 will last, at least for now the point is still responding positively to new-found takeaway capacity (see related story). It was one of the Tuesday market’s few gainers with an increase of about a nickel.
November futures were back to providing negative guidance to the next-day cash market after falling 15.3 cents (see related story).
Atlantic tropical activity remained quiet.
Outside forecasted high temperature declines of around 20 degrees for Wednesday at such Midwest locations as Des Moines, IA, warming trends were expected in the Northeast, Rockies and California, while barely perceptible declines were due for most of the South. Northern Natural Gas said its Upper Midwest market area would average about 37 degrees both Wednesday and Thursday before beginning a new warm-up Friday.
The National Weather Service is looking for the first half of next week to be warmer than normal in the eastern half and colder than normal in the western third of the U.S.
Abundant storage continues to weigh on the cash market. Southern reported that as of last Thursday its two storage fields contained 58.0 Bcf of working gas, or 97% of their total capacity of 60.0 Bcf. That is ahead of previous levels of 57.2 Bcf (95%) on Oct. 28, 2010 and 54.9 Bcf (92%) on Oct. 29, 2009, Southern said.
A Gulf Coast marketer said the screen decline and milder weather in many areas should cause prices to fall further Wednesday, although he allowed that quotes might rally in the Midwest due to that region’s colder outlook.
IAF Advisors analyst Kyle Cooper said he expects a storage addition of 75 Bcf to be reported for the week ending Oct. 28. Similarly, Stephen Smith of Stephen Smith Energy Associates said he is maintaining his original estimate of a 75 Bcf injection. Credit Suisse’s Stefan Revielle anticipates a 72 Bcf build.
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