In a market with some inconsistencies, the overall price direction Thursday was overwhelmingly down, but scattered flat to higher points in the Gulf Coast and Northeast ran contrary to the general trend. Excluding those exceptions, losses ranged from about a nickel to nearly 40 cents.

A supervolatile and heavily traded Henry Hub recorded the day’s biggest gain of about 20 cents and almost captured the highest quote of the day at $6.80, but yielded that title to also-volatile Transco Zone 6-NYC’s $7.00. Their advances were conspicuous in market areas where other points were falling by as much as 25-30 cents.

The majority softening was quite understandable in light of the previous day’s screen loss and mild to cool weather in all areas. Bearishness was reinforced by the Energy Information Administration’s report of an 81 Bcf storage injection in the week ended Oct. 1. The volume came in near the high end of the range of previous expectations. The screen reacted negatively at first, but then clawed its way back to an eventual gain of 21 cents on the day.

A couple of sources said it was obvious that the natural gas contract was rehitching its wagon to Nymex’s team of oil-related horses again. Crude oil for November delivery established a new intraday record of $53/bbl before retreating to a settlement gain of 65 cents to $52.67. One of the sources commented that it’s difficult lately to say how the oil/gas relationship will go. “One day [Tuesday] oil and gas move together, then separate the next day [Wednesday] only to get together again the day after that [Thursday],” he said.

A producer noted that the high Henry Hub prices “happened really early, and quotes fell steadily after that” to yield a huge dollar-plus range at the point. Transco Zone 6-NYC behaved similarly, he said. He had no explanation for either early spike, saying the peaks had already occurred before he began trading and both points were already in free-fall by then. “As the market area fell, that pushed Gulf points down as well,” he said, adding that at first it didn’t pay to transport gas based on the Gulf Coast/Northeast spreads at many points.

In a side note, the producer said very high prices for heating oil are leaving room for gas to rise further. He reported hearing that heating oil for January is worth something like $10 at the burnertip on a gas-equivalent basis.

A Houston-based marketer theorized that the unusually high early numbers at Henry Hub may have been due to “a little fear” about storage, saying that might have been based on the continued high levels of Gulf of Mexico shut-ins but certainly had no foundation considering where the EIA report came out. Chicago citygates got beaten down to around $5.40 late on mild weather forecasts, the marketer continued. “The area LDCs said they didn’t want anything I had to offer.” He said people were calling him Thursday afternoon trying to shed weekend gas in advance, which is a good sign that prices will go lower Friday despite Thursday’s Nymex advance. They didn’t talk about any specific prices, wanting to index weekend deals instead, he said.

The heat in parts of the West that had given partial price support to some regional points Wednesday is being replaced by a cooling trend that will yield average to below average temperatures by Sunday, according to The Weather Channel. As a consequence, many of Thursday’s larger declines were concentrated in the West. Another price depressant was a customer-specific OFO issued by PG&E (see Transportation Notes).

Following a bit of midweek chill, Northeast weather is getting “pretty seasonable” again, said one trader in the region. “We had one morning this week [with temperatures] in the 30s, but it gets up to around 70 in afternoon, so we’re not getting a lot of heating load out of it.” She said she had observed some buyers becoming more concerned about winter supply and wanting to lock in term gas now. “I think they had been putting it off in expectation of prices dropping off.” They seemed to have every right to expect a drop based on fundamental price influences, she conceded, but for whatever reason they just haven’t been getting it.

Modest progress returned in restoring offline offshore production. With 19 companies reporting to it, Minerals Management Service said shut-ins were at 1,775.12 MMcf/d Thursday, a drop of just over 25 MMcf/d from the day before.

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