Soaring Northeast cash prices were unable to offset a broader overall market decline averaging 11 cents Friday. Gulf and eastern points were especially hard hit. December futures fell 14.5 cents to $3.554 and January tanked 13.8 cents to $3.680. December crude oil fell $2.23 to $84.86/bbl.

Florida and Gulf traders saw prices and basis slump amid a seasonal shift in demand. “We saw prices on [Florida Gas Transmission] Zone 3 go from about a 30- to 35-cent premium [to Zones 1 and 2] to about 5 cents Friday,” said a Florida municipal buyer. “It crashed hard and is more in line with what everyone was thinking it would be in October and November. Zone 3 traded about $3.48, and that put it in alignment with Zones 1 and 2 which were trading at about $3.40 to $3.41.

“Fortunately for us, we were buying on Zone 3 so that worked out well. Our loads now are close to nothing and will be low until we get a cold front sometime in December.”

Quotes for weekend and Monday delivery on Florida Gas Transmission Zone 3 plunged 15 cents to average $3.47, and other Gulf Coast delivery points tumbled as well. Deliveries to Transco Zone 3 fell 10 cents to $3.39, and gas on Tennessee 500 L shed 9 cents to $3.38. Gas at Henry skidded a dime to $3.40, and deliveries to Tetco E LA fell 10 cents to $3.33. On ANR SE prices fell 7 cents to $3.38.

In the Northeast prices shot higher as forecasts called for a major incursion of cold air. AccuWeather.com meteorologists said it would trend colder and windier into the weekend all the while keeping a sharp eye on a potential storm for this week. “Unfortunately, Sandy has helped to make a big buckle in steering-level winds in its wake. While the winds will bring progressively drier air into the region, the cold flow from Canada will pick up,” said meteorologist Alex Sosnowski.

“As the air becomes drier into the weekend, more sunshine is in store by day, but clearing skies will bring lower temperatures at night. For those still without power in the wake of Sandy, the cold will be penetrating and seemingly never-ending. Temperatures will dip well into the 30s inland and close to 40 along the coast at night through the weekend. For those outdoors during the nighttime and early morning, [wind chill] temperatures will dip into the 20s.”

AccuWeather.com forecast that Friday’s high in Boston of 53 would ease to 52 on Saturday before reaching 45 on Monday. The normal high in Boston at this time of year is 56. New York City’s Friday high of 54 was predicted to ease to 50 on Saturday before sliding further to 46 on Monday. The normal high in New York is 59 at this time of year.

Quotes for weekend and Monday deliveries on Algonquin soared 88 cents to average $5.22, and on Tennessee Zone 6 200 L gas jumped 64 cents to $5.11. Parcels into Iroquois Waddington added 27 cents to $4.53.

Farther south prices slumped. Weekend and Monday gas into Tetco M-3 fell 9 cents to $3.60, and gas on Dominion shed 9 cents to $3.49. Deliveries to Transco Zone 6 New York dropped 11 cents to $3.60.

Futures traders saw the day’s decline as a result of market focus on record storage inventories. Thursday’s government storage report put inventories at 3,908 Bcf, a new record. “We will reiterate bearish items such as a warming in the six-15 day temperature views that extend to mid November. We are also emphasizing a focus away from a long-standing contraction in the year over year supply surplus and toward absolute supply levels with storage at a record with the approach of seasonal peak in a couple of weeks,” said Jim Ritterbusch of Ritterbusch and Associates.

“The charts have taken on a much more bearish appearance following recent trend line violation, head and shoulders formation, etc. This has encouraged increased selling from the large speculative community that has generally been attempting to exit the short side of the market in recent weeks. Looking ahead to next week, we don’t anticipate considerable downside price follow through. However, we can easily construct a case for additional slippage to the $3.47-3.49 region should weekend updates to the short term temperature views suggest an extension of above normal temps,” he said in closing comments to clients.

Tom Saal, vice president of INTL FC Stone in Miami, in his work with Market Profile has turned his attention to perhaps more useful monthly analyses. “Using spot contract monthly Market Profiles shows the longer-term evaluation of horizontal versus vertical pricing,” he said.

For October, spot futures carved out a profile with a value area between $3.531 and 3.359. On a daily basis the market will often test the prior day’s value area, often that day, but monthly profiles function the same way. Saal expects the market to test the $3.531 to $3.359 value area followed by a test of a second value area at $2.979 to $2.739.

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