Although heating load was growing a bit Tuesday as colder temperatures spread farther south in the West and farther east into the Midwest and Midcontinent, prices were unable to sustain Monday’s big gains. Instead, the market fell at nearly all points Tuesday by mostly moderate amounts ranging from a couple of pennies to nearly 30 cents.

Gains were isolated at Texas Eastern’s East Texas pool, which had been trading well below neighboring East Texas points in recent days, and at Dawn and intra-Alberta.

One source said he thought falling prices were finally acknowledging mostly weak fundamental support and high comfort levels in storage. The recent rapid descent in crude oil futures, which settled below $50/bbl Tuesday for the first time in about a month, also was a factor, he said. The natural gas screen, after scarcely budging Monday with a half-cent loss, fell a little more than 15 cents Tuesday, which likely will help extend the cash price slides Wednesday, he added.

The source also suggested that after what seemed at times a glacially slow pace of recovering shut-in offshore production in nearly a month and a half after Hurricane Ivan, a recent pickup in restoration speed may be contributing a bit to bearish feelings.

Minerals Management Service reported another sizeable reduction of offline Gulf of Mexico gas Tuesday. It said outages had fallen to 752.88 MMcf/d, or 152 MMcf/d less than the day before. The cumulative tally of deferred production since Sept. 11 grew to 111.012 Bcf, MMS said.

The physical market may be softening for now, but there are more bullish weather prospects ahead. A Northeast marketer said his region was still experiencing moderate temperatures, “but we’re due for colder weather next week.”

The National Weather Service forecast for the Nov. 8-12 workweek is almost diametrically opposite to the one it had for the current week. This time NWS expects below normal temperatures everywhere east of a line from northeast Wisconsin through East Texas. It predicted above normal readings everywhere west of a line from central North Dakota to southeastern Arizona. Normal conditions are expected in the nation’s vertical midsection.

Western Canada points switched price trends primarily due to linepack issues (see Transportation Notes). Intra-Alberta quotes, which had been the only ones left out of sizeable gains in the rest of the market Monday while NOVA banned any positive imbalances, rose about C20 cents Tuesday as imbalance tolerances were returned to normal. Meanwhile, Westcoast Station 2, which had taken part in Monday’s general uprising, fell a little more than C20 cents Tuesday as the pipeline set its pack tolerance to zero.

Analysts Thomas Driscoll of Lehman Brothers and Kyle Cooper of Citigroup weighed in with predictions of 45 Bcf and 36-46 Bcf injections respectively to be announced in Thursday’s storage report.

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