Sub-freezing low temperatures either continuing or returning Friday in sections of the Deep South proved insufficient to sustain higher prices in a modest majority of the cash market Thursday.

Most points recorded losses of 2-3 cents to about 40 cents, with most of the largest ones concentrated in the Midcontinent. Northeast citygates saw the most strength amid quotes that ranged from flat to about 40 cents higher.

Flat numbers were very common along the Gulf Coast.

The Energy Information Administration’s report of a 16 Bcf injection into storage during the week ending Nov. 14 was highly bearish in comparison to consensus estimates of a small withdrawal, which would have been the first of the current heating season. Nymex traders clearly favored the bear case after getting evidence that storage builds were continuing half a month after the “traditional” injection season had ended. Cash prices Friday will have a hard time going against the negative influence of a 42.7-cent screen fall Thursday (see related story).

Lake-effect snowfalls are predicted for several parts of the Midwest Friday, and according to The Weather Channel (TWC), totals of more than one foot “will be especially common east of Cleveland.” Highs will struggle to reach 20 in the Upper Midwest and just reach 50 in southwest Kansas, the forecasting service said. Similarly frigid and snowy conditions are due Friday in the Northeast, although the frozen precipitation is expected to disappear by Sunday.

The South should feel more like mid-January than late November through the weekend, TWC said, although snow showers are likely to be limited to the southern Appalachians. Nearly all of the region’s lows in the 20s will occur east of the Mississippi River, although Little Rock, AR, can expect to bottom out around 29 Friday.

Much of the West is basking in weather ranging from cool to warm. The coldest sections are the mountainous parts of the Pacific Northwest and Rockies.

It wasn’t hard to figure out why frigid weather in many areas failed to keep most prices firm, said a Midcontinent producer. Current daily spot prices are higher than the ones for December, he said, so people are taking out of storage to sell now and will buy December gas to replace it in an arbitrage opportunity. For example, NGPL-Midcontinent traded in the $4.70s for Friday flows, but could be bought in the mid $4.30s for December, he noted.

At least in the Midcontinent, next week is expected to be less cold than the current one, he said.

The producer said he didn’t see a problem with a bidweek in which Nymex would have open outcry trading on the Friday after Thanksgiving, even though bidweek will have ended two days earlier. Indexes will be set quickly and will be liberally used by traders, he predicted, adding that he looks for nearly all December business deals to get finished by the end of Monday, which is expiration day for prompt-month futures.

The producer said because of his expectation for a lot of index-based deals, he is a bit concerned that first-of-month indexes might be set by just a few fixed-price quotes.

The pace of restoring production lost to hurricanes in the Gulf of Mexico picked up a bit over the past week. Minerals Management Service (MMS) said Wednesday it had reports from 55 companies of 1,805 MMcf/d remaining off-line. The gain of 257 MMcf/d from a week earlier was more than three times the 73 MMcf/d of progress during Nov. 6-12 period. MMS also said crude oil shut-ins had been reduced by 32,816 b/d to 212,216 b/d in the most recent report period, while the count of evacuated platforms dropped by four to 58.

Beginning with Wednesday’s report, MMS is cutting back its issuance of statistical updates to once every two weeks on Wednesdays. The next update is due Dec. 3.

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