With a few flat to mildly softer points tucked into every market area, prices found enough heating load Wednesday for an overall advance. Gains ranged from 2 or 3 pennies to as much as a quarter.

The moderate firmness is unlikely to last, though. Natural gas futures began Wednesday on a slightly firmer note but then got dragged down to an eventual loss of nearly 21 cents by massive weakness among Nymex’s oil-related offerings. A plunge of $3.64 to $45.49/bbl by crude oil for January delivery was triggered by reports from the Department of Energy and American Petroleum Institute showing substantive increases in oil product inventories during the previous week, thus soothing fears of a heating fuel crunch this winter.

The plunge left crude futures nearly $10 below their peak above $55/bbl in late October.

“I’m sure cash will be softer Thursday after today’s big weakness” in all energy futures products, said a Gulf Coast producer who trades the Northeast. He didn’t think the market has enough weather-related demand left to keep prices from following the screen lower. A lot of basis deals for December baseload got done in the Northeast during bidweek, which helps explain why first-of-month index increases tended to be biggest there. However, he noted that much of his company’s production is hedged in such a way that limited the amount of profit he could make on his last-day settlement basis sales.

A couple of factors indicate falling prices in the East next week: the entire region is predicted to have above normal temperatures, and Trunkline LNG expects to resume operations next Monday at its Lake Charles, LA import terminal. That would be a day earlier than the previously scheduled restoration of sendout (see Daily GPI, Nov. 18). A producer estimated that the terminal could put up to 500 MMcf/d back into the market that had been missing since it halted sendout for expansion work Nov. 22.

However, a Midwestern marketer reported hearing that a low-pressure area currently over the Gulf of Alaska had the potential for making his region a lot colder than expected in the middle of next week, “so we’re monitoring the forecasts carefully.” Everybody is on pins and needles waiting for the storage report Thursday to see if there will actually be a revision of last week’s surprisingly high withdrawal volume (49 Bcf), and if so, by how much, he added. He said his area was sort of moderate around 40 degrees Wednesday. Yes, that’s on the cold side, he conceded, “but not too bad for the Upper Midwest in early December. After all, it’s supposed to get cold here in December.”

The West probably has the best chance of avoiding price drops Thursday because highs in the teens are forecast for sections of the Rocky Mountains, and even Southern California and Arizona aren’t expected to get above the 60s, The Weather Channel said. The South is due to warm up slightly following an early-week cold front.

Analyst Kyle Cooper of Citigroup said his estimation of Thursday’s storage report ranges from a draw of up to 7 Bcf to an injection of 3 Bcf.

Hurricane season officially ended Tuesday, but Mother Nature doesn’t necessarily have a calendar on her wall. Tropical Storm Otto has formed but bears no significance to the gas market. Otto was 860 miles east-southeast of Bermuda Wednesday and appeared to be weakening as it moved slowly southeastward away from North America, the National Hurricane Center said.

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