The cash market on average fell around a nickel Tuesday with pervasive weakness seen in all sections of the country. The Midwest was weak, but isolated gains were noted at Northeast points. East and Rockies locations fell. At the close of futures trading, December had risen 11.3 cents to $3.832 and January had gained 10.7 cents to $3.944. January crude oil tumbled $2.53 to $86.75/bbl on hints of a break in Middle East fighting.

“We bought gas today on Consumers at $3.80, and Michcon has let us buy as much as we are allowed for the month,” said a Michigan marketer.

The marketer reported difficulties in using Michcon and hinted that the higher price was due to the pipeline’s desire to move gas out of storage, thereby limiting opportunities for typical customers. “Michcon is being very tight, and we have already had to tell one customer that what Michcon would allow them to flow wouldn’t cover their monthly requirements.”

The marketer also said he thought the upcoming weekend would be colder, thus possibly placing more demands on the pipeline.

“Winter will first make its comeback across the northern Plains Thanksgiving Day, having those taking advantage of early shopping deals Thursday night shivering,” said meteorologist Kristina Pydynowski. “Frigid winds will be howling, and even some snowflakes will be flying as many residents of the northern Plains will be heading out Thursday evening. The bitter cold will then invade the Midwest on Black Friday, holding temperatures 10 to 20 degrees below Thanksgiving Day’s mild highs of the 50s and 60s.”

Tuesday’s high in Chicago of 59 was forecast to ease to 58 on Wednesday before plunging to 42 on Friday. The normal high in the Windy City at this time of year is 47, according to Detroit’s Tuesday high of 56 was anticipated to reach 57 on Wednesday before sliding to 48 on Friday. The seasonal high in Detroit is 47 as well.

Quotes at the Chicago Citygates eased 5 cents to average $3.70, and Wednesday deliveries on Michcon slipped 4 cents as well to $3.84. On Consumers Wednesday gas fell 2 cents to $3.76 and on Alliance next day parcels were 3 cents lower $3.74. Gas at Dawn eased a penny to $4.14.

Next-day power prices were weak as well. Day-ahead locational marginal prices at the New England Power Pool’s Massachusetts Hub fell $3.71 to $61.87/MWh, and nest-day real-time peak power at the PJM Western Hub eased $1.32 to $37.56/MWh.

Next-day quotes at Algonquin Citygates added 23 cents to $7.28, and deliveries to Iroquois Waddington were 10 cents lower at $5.89. Deliveries on Tennessee Zone 6 200 L gained 14 cents to $7.21.

Prices at eastern points were also down. Quotes on Dominion fell 3 cents to average $3.73, and Wednesday deliveries on Tetco M-3 fell nearly a nickel to $3.92. Gas destined for New York on Transco Zone 6 gave up 3 cents to $3.94.

In the Rockies traders also saw lower quotes. Next-day gas on CIG was off a nickel to $3.44, and at the Cheyenne Hub Wednesday parcels were down 5 cents to $3.48. At Opal, gas was quoted at $3.54, lower by 7 cents, and on Northwest Pipeline WY next-day gas came in at $3.46, down 6 cents.

An Oklahoma City futures trader utilizing a trend-following model said his program went long “about Nov. 12 my moving average was crossed. We are now five days above the moving average, thus confirming the trend has changed [to higher prices]. Now I would be buying dips down to $3.76 on the February contract. That should be good support so on 8- to 10-cent dips I would be a buyer. If prices dropped below $3.75 I would be out, but not short.”

Tuesday’s advance was triggered by changes in near-term weather calling for cooler temperatures. Forecasters are seeing colder-than-normal temperatures in their extended forecasts. WSI Corp. of Andover, MA, in its 11- to 15-day outlook shows below-normal temperatures from western Pennsylvania, Ohio and Indiana to Wisconsin and Minnesota. From the Kansas-Colorado line westward is predominantly above normal. The remainder of the country is expected to be seasonal.

“[Tuesday’s] forecast is a little colder than yesterday’s outlook in the Midwest while warmer in much of the West and for portions of the Atlantic Seaboard. Temperatures across the north-central U.S. may run warmer than currently forecast. Despite a potentially cold start to the period and a negative NAO [North Atlantic Oscillation] phase, most models aside from the 00z GFS operational run indicate a strong Pacific flow becoming reestablished across the country. Confidence is near to below average. There is reasonably good large-scale model agreement but a number of important technical differences.”

Analysts see the expectations of colder Midwest temperatures lending support to the market. “We are seeing larger day-to-day volatility in the short-term temperature views than is usually the case,” said Jim Ritterbusch of Ritterbusch and Associates.

“Latest updates suggestive of below-normal temperatures that are spreading across a wide swath of the nation particularly the upper Midwest have likely halted this week’s selling interest with values potentially ratcheting their way back up into the Thanksgiving holiday break. Although four-day weekends at many plants will cut into industrial usage amidst mild Thanksgiving temps across most regions, we look for the market to be more focused on storage reports to be issued during the first half of December rather than on a supply number that could prove bearish next week.” Ritterbusch is forecasting a draw of 23 Bcf in Wednesday’s storage report.

Wednesday’s Energy Information Administration inventory report is expected to show the second draw of the season. Analysts at United ICAP calculate a withdrawal of 31 Bcf and a Reuters poll of 20 traders and analysts revealed an average 24 Bcf reduction with a range of -7 to -36 Bcf. Last year 9 Bcf was injected, and the five-year average shows a 3 Bcf build.

The report will be released at noon EST.

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