Cash prices overall staged a broad rally Monday with an average gain in the double digits. Northeast and West Coast points were notably strong as power generation was reported as lean and next-day loads were forecast to increase. Gulf and eastern locations were also strong. At the close of trading December futures had fallen 7.1 cents to $3.719 and January had lost 6.7 cents to $3.837. January crude oil vaulted $2.36 to $89.28/bbl.

Next-day gas prices in the Northeast surged as demand for Tuesday power climbed amid signs of thin supplies and moderate weather. “It’s going to be a little warmer tomorrow in Boston, 50 for a high and 41 for a low but the normal low is 37,” said a New England marketer. “It gets a little cooler, then warmer for Thursday and Friday. The cooler weather expected for next week does look like it going to be there.”

Temperatures may be mild, but electric power generation in New England is somewhat lean. According to the NGI’s NRC Power Reactor Status Report, five nuclear plants in the area were either offline or producing at less than capacity. The 813 MW Fitzpatrick 1 facility northeast of Oswego, NY, was listed at 0% and the 480 MW Ginna plant northeast of Rochester, NY, could only muster 1% output. The 871 MW Millstone 2 west of New London, CT, had 0% output, and the 565 MW Niagra Mohawk Nine Mile Point 1 east of Oswego, NY, was up to 87%. The 1,142 MW Niagra Mohawk Nine Mile Point 2 was listed at 1%.

The five plants are just a portion of 31 nuclear plants shown as either offline or producing at less than 100% of full power in the report. The 31 nuclear plants’ generation represents a loss of 23,030 MW out of total U.S. capacity of 100,900 MW generated from 104 facilities.

ISO New England in its morning report showed capacity available of 20,491 MW and capacity required including reserves of 20,150 MW, leaving a thin margin of just 341 MW.

IntercontinentalExchange reported day ahead locational marginal price for peak power at the Massachusetts Hub of the New England Power Pool (Nepool) jumped $12.58 to $65.58/MWh.

At the Algonquin Citygate next-day gas deliveries shot ahead $1.54 to average $7.05 and deliveries to Iroquois Waddington gained 81 cents to $5.99. Buyers on Tennessee Zone 6 200 L found themselves paying $1.68 more to $7.07.

Farther south power markets were not quite as stressed, and gas price rises somewhat more tempered. Next-day deliveries on Dominion were 17 cents higher to average $3.76 and gas on Tetco M-3 was up 16 cents to $3.96. Gas bound for New York on Transco Zone 6 rose by 20 cents to $3.97.

Next-day real time peak power at the PJM Western Hub fell $5.05 to $38.88/MWh.

Forecasts of increased power loads on the West Coast helped lay a firm foundation for the day’s gains in next-day gas prices. The California Independent System Operator predicted that Tuesday’s peak load would reach 31,435 MW, up from Monday’s forecast maximum of 30,108 MW.

West Coast next-day prices advanced as much as a quarter. Malin was reported up 14 cents to average $3.66 and deliveries to PG&E Citygate added 7 cents to $3.91. At the SoCal Border quotes were 24 cents higher at $3.82 and at SoCal Citygate next-day deliveries rose 19 cents to $3.92. On the El Paso S Mainline next-day gas jumped 23 cents to $3.80.

Gulf prices were also strong. Tennessee 500 L added 14 cents to $3.67 and deliveries to the Henry Hub rose 17 cents to $3.63. Parcels into Texas Eastern E LA gained 8 cents to $3.61.

Futures traders saw overall soft prices but not much room to work lower. “The market kind of fell out of bed at the end of the day, but I tend to think the market will stay firm between $3.65 and $3.90,” said a New York floor trader.

Risk managers continue to recommend selling for producers and those with exposure to lower prices. Mike DeVooght of DEVO Capital Management said trading accounts and end-users should stand aside for now, but producers should hold short the remaining winter strip at $3.75-3.95 and continue to make light sales of any winter months above $3.75-3.95.

Addison Armstrong, senior director of market research at Tradition Energy, sees the gas market as “continu[ing] to focus on heating demands during the upcoming winter while discounting the near-record storage and production levels of gas. Weather forecasts are little-changed, with above- to well-above-normal temperatures expected across the western and central sections of the U.S. in the next five days. The East Coast is expected to see normal temperatures in the next five days, followed by near-normal temperatures for the eastern half of the country in the six-10 day forecast before a return to mostly normal to below-normal temperatures in the beginning part of December.”

The East Coast may see normal temperatures in the near term, but that is expected to translate to sharply reduced heating loads. The National Weather Service (NWS) predicts well-below-normal accumulations of heating degree days (HDD) for the upcoming week. For the week ending Nov. 24 NWS forecasts New England will see 157 HDD, or 25 fewer than normal; and New York, New Jersey and Pennsylvania should experience 136 HDD, or 32 fewer than normal. The Midwest from Ohio to Wisconsin is anticipated to endure just 122 HDD, or 70 fewer than normal.

Tom Saal of INTL FC Stone in his work with Market Profile correctly anticipated that December futures would test last week’s value area at $3.71 to $3.798.

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