A small loss by intrastate OGT and flat quotes at several points averted a third straight day of across-the-board upticks Thursday. Cooling trends throughout most of the eastern United States easily outweighed mostly moderate conditions in much of the West in sustaining further gains at most points. A prior-day screen loss had little effect on general cash market firmness Thursday but may have more impact Friday.

A large majority of points remained in moderately bullish mode as they ranged from about a nickel to nearly a quarter higher. Most of the larger gains occurred in the Gulf Coast and Northeast.

The Energy Information Administration reported a storage addition of 18 Bcf for the week ending Oct. 16. Estimates by noted analysts were in a particularly wide range this time, going from as low as 5 Bcf to as much as about 30 Bcf. But overall expectations appeared to center around the 20 Bcf area, which made the actual volume reported just a tad on the bullish side. But perhaps in what one analyst regarded as a “sell the news” attitude, Nymex traders sent the November natural gas contract 15.3 cents lower amid overall softness in the energy futures complex (see related story).

Most locations in the Midwest, Northeast and South were due to see temperatures moving downward starting Friday, and according to the National Weather Service’s forecast, a great deal of that area west of the Eastern Seaboard will continue to see below-normal readings next week (see Daily GPI, Oct. 21). Florida was an exception to the southern cooling tendency with highs due to stay in the upper 80s.

Other than the Rockies getting slightly warmer and Western Canada staying cold, mostly moderate weather was expected to continue to prevail in most of the West.

Neither posed any threat to Gulf of Mexico production, but two tropical systems were being monitored Thursday by the National Hurricane Service (NHC). An ongoing low-pressure area in the southwestern Caribbean Sea just off Nicaragua’s east coast was staying nearly stationary and continuing to produce rain. The remnants of a cold front over parts of the eastern Bahamas and the adjacent Atlantic Ocean were doing much the same, NHC said, except this system was forecast to move slowly westward. Little chance of development was expected in either case.

Hints of excess supply were surfacing at both ends of the country. With PG&E issuing its third high-inventory OFO in less than a week (see Transportation Notes), Malin and the PG&E citygate responded with flat numbers Thursday after having risen about 20 cents each Tuesday despite the one implemented Wednesday. Tennessee cited warmer weather along with a storage facility testing outage in saying it was issuing an OFO Action Alert for Saturday.

And although it did not take any constraint actions, Dominion mentioned storage levels, planned shut-in tests and scheduled maintenance in urging customers to do whatever is necessary to keep storage deliveries within their firm entitlements.

Asked if he thought Thursday’s screen decline would be able to take cash numbers lower Friday, a Midwest marketer said he had “given up on thinking there’s much correlation” between the futures and cash markets. Logically he thought the futures weakness “should” be able to induce cash softness Friday, but he added that it’s hard to tell anymore. There will be a fair amount of heating load in the Midwest this weekend, he said, with The Weather Channel seeing the potential for wet snow in the region’s upper reaches, but he wasn’t sure if it would be enough to sustain price gains any further.

Now it’s kind of wintry in the marketer’s local area with lows in the 30s, but he was “kind of hoping we’ll get a little more warmth again” before real winter sets in.

His company hasn’t gotten any November baseload trading going yet because it’s still planning strategy, he said. But the marketer added that he is expecting more bidweek liquidity than in recent months because the heating season will be getting under way.

A utility buyer in the South said his company has lost all of its cooling load for the time being with highs starting to fall into the low to mid 60s. For that reason it is buying a little extra swing gas than usual because it doesn’t want to start drawing storage yet, he said.

He noted that the Louisiana points where he usually sources gas had been averaging around $2.25 at the start of October and were now more like $4.90. He figured at least part of the big increase was due to cash prices “still trying to close the gap with futures.”

Area weather is cool but not especially cold, the buyer said, and will stay pretty much the same way through next week.

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