For the Monday-Thursday week preceding the extended Labor Day holiday weekend natural gas prices nationally averaged a nickel gain to $3.54 with most regions adding anywhere from a nickel to 9 cents.

The Northeast proved the one exception and lost a nickel to average $3.40 in large part due to steep declines at a few Marcellus-burdened points. The Northeast also proved to be the home to the week’s weakest market point, Tennessee Zone 4 Marcellus, which shed 33 cents to $2.08. The week’s strongest individual point was Northwest Sumas in the Rockies with a gain of 17 cents to $3.29.

East Texas and South Louisiana both gained a nickel to $3.50 and the Rockies and South Texas each added 6 cents to $3.42 and $3.50, respectively.

California added 7 cents to average $3.75 and the Midwest and Midcontinent were both higher by 9 cents to $3.83 and $3.52, respectively.

September natural gas futures expired Wednesday at $3.567 and for the Monday-Friday period, October futures gained 2.8 cents to $3.581. The Energy Information Administration reported a build of 67 Bcf Thursday morning for the week ending Aug. 23, which was above most expectations.

In Friday trading for the Labor Day Holiday three-day weekend, physical natural gas prices on average for the Sunday-Tuesday period were steady with strength at Northeast locations and an overall balanced market capable of offsetting free-falling prices at certain Marcellus points. Points reporting gains were closely matched with those showing losses. At the close of futures trading, October had retreated 3.7 cents to $3.581 and November was down by 3.6 cents to $3.684.

Analysts see events lining up which may prompt a hefty futures price plunge. Jim Ritterbusch of Ritterbusch and Associates, said, “The temperature factor looks neutral/slightly bearish from our perspective with generally cool temps covering the northeast region of the nation within the eight-14 day forecast window. [Thursday’s] price action reinforced our expectations for some more near-term price chop as the market appears poised to price in some occasional storm activity that will likely be gaining traction with the arrival of September. Consequently, we are maintaining a neutral view for now as we continue to look for a spot and a time to establish a short position in anticipation of a price decline of as much as 30-35 cents from [Thursday’s] close.”

Analysts at Tudor, Pickering, Holt & Co. urged clients to keep everything in perspective. “Assuming normal injections through October, storage should start winter [at] 3.8 Tcf. However, if the more bullish supply and demand balance persists (1 Bcf/d undersupplied), storage could start winter closer to 3.7 Tcf,” the analysts said in a note Friday. “Moreover, with the recent improvement in the supply and demand balance with gas at/below $3.5/Mcf, gas provides more confidence in our $3.50- to $4.50/Mcf gas price band over the near/medium term; $3.50/Mcf gas ain’t great, but it is better than 2012 pricing.”

Spot prices at the PG&E Citygates Friday were as high as any market point with the exception of a few New England locations, and analysts saw it as a combination of events. “It’s a confluence of events with what is going on in Alberta,” said a Calgary-based analyst. He pointed out that the Foothills pipeline, which brings gas from Alberta to Malin, has been undergoing work due to the recent flooding. “It has caused TransCanada to conduct investigative work and reduced its capability and has reduced the amount of gas that can flow to PG&E.

“That coupled with the [lean] hydro situation this year has caused the gas plants in the Pacific Northwest to burn maximum levels of gas to balance the power grid. They can’t get any more gas through Northwest to hit Malin, so it’s put everything in a semi-tight situation,” he said.

Sunday-through-Tuesday gas into Malin slipped 2 cents to $3.53, but deliveries to PG&E Citygate added 4 cents to $4.00. Gas into the Socal Citygates was seen unchanged at $3.87, and parcels at the SoCal Border slipped about 2 cents to $3.79. On El Paso S Mainline packages changed hands at $3.83, down 2 cents.

Power demand in California is also stout. Friday CAISO (California Independent System Operator) reported forecast peak load at a hefty 44,457 MW, but Saturday’s peak was expected to subside to 38,016 MW.

IntercontinentalExchange reported that Tuesday peak power at NP-15 settled at $48.83/MWh, up $2.50, and power into SP-15 rose $2.45 to $52.07/MWh.

Firm California prices contrasted sharply with free-falling quotes in the infrastructure-challenged Marcellus region. Gas for Sunday-Tuesday at Transco-Leidy Line plunged 52 cents to $1.17, and deliveries on Tennessee Zone 4 Marcellus dropped 39 cents to $1.16.

Price relief should be forthcoming. The Federal Energy Regulatory Commission approved Transco’s request to place additional facilities of its Northeast Supply Link Project into service. Transco spokesman Chris Stockton estimated that 100 MMcf/d is now flowing on the Caldwell Uprate, Roseland Meter Station and Montclair Meter Station.

Northeast prices firmed. Algonquin Citygate was seen 35 cents higher at $3.93, and on Tennessee Zone 6 200 L Sunday Tuesday gas traded at $3.83, up 21 cents. Deliveries to Iroquois Waddington eased about a penny to $4.14.

On Dominion gas rose 2 cents to $3.27, and on Tetco M-3 packages traded at $3.47, down 3 cents. Gas bound for New York City on Transco Z6 rose 4 cents to $3.66.

Overnight weather forecasts changed little. In its morning six- to 10-day outlook, MDA Weather Services showed below-normal temperatures east of a line from Michigan to Alabama and above-normal temperatures west of a line from Minnesota to Louisiana. “Changes were mostly small and mixed [Friday], with the net leaning slightly to the warmer side. Texas looks a bit warmer during the second half, while the East appears a bit more variable resulting in less below coverage on the composite.

“On the flip side, a pesky upper low has cooled off the Pacific Northwest early on, though the exact details of this feature are yet to be determined. The big picture pattern still otherwise includes building ridging in the Northwest and a couple rounds of cooler air feeding into a trough in the East. Confidence has held at moderate again today,” the forecaster said.

In its 2 p.m. EDT Friday report, the National Hurricane Center said it was following two systems. The first, a tropical wave about 650 miles east of the Lesser Antilles, was given a 10% chance of reaching tropical cyclone status, and the second, a broad area of low pressure off westernmost Africa, was experiencing conditions favorable for development. It was given a 40% chance of becoming a tropical cyclone within the succeeding 48 hours.

In Thursday’s trading natural gas prices for physical delivery Friday overall on average were unchanged. Factor out the extreme low prices at just a couple of Marcellus points burdened by a lack of infrastructure and the physical market on average gained a couple of pennies. Northeast and East points were solidly in the loss column and points in the Upper Midwest fluctuated within a couple of cents of unchanged. Following news of the larger-than-expected 67 Bcf storage build, October futures peeled off 13 cents from earlier highs before recovering. At the close Thursday October had gained 3.6 cents to $3.618 and November was up by 3.0 cents to $3.720.

The strong finish by the futures notwithstanding, analysts are questioning if the heat wave of last week really had any impact on supply demand balances. “So far the first week or so of the evolving heat wave did not result in a significant underperformance in the weekly injection as it was also slightly above both last year and the five year average,” noted Dominick Chirichella, senior fellow at the Energy Management Institute in New York. “Today’s disappointing injection level is raising concern in the minds of the bulls insofar as how the next several injections will evolve as the weather forecast actually begins to change.”

Inventories currently are at 3,130 Bcf, and injections for the 9 weeks remaining to the traditional Oct. 31 end of the season need to average 72 Bcf weekly to attain the five-year average ending inventory of 3,776 Bcf and 89 Bcf weekly to reach the 2012 record ending inventory of 3,930 Bcf. At 3,130 Bcf inventories now stand 235 Bcf less than last year at this time and 45 Bcf above the 5-year average. In the East Region 49 Bcf was injected and in the West Region 2 Bcf was added. Inventories in the Producing Region increased by 16 Bcf.