Overall, the cash market averaged a 2-cent decline Tuesday, but the Northeast still managed to trade in volatile fashion as traders and marketers continued to adjust to restrictions on Algonquin Pipeline.

Northeast points plunged, but Eastern points were in positive territory. Midwest locations were lower, but Midcontinent gas was mixed. At the close of futures trading October had dropped 9.2 cents to $2.773 and November had skidded 5.4 cents to $2.961. October crude oil continued to fall, losing another $1.33 to $95.29/bbl.

Northeast points recorded double-digit losses as traders and market players sorted out the ramifications of maintenance and sharp curtailments over sections of Algonquin pipeline bringing gas north into Boston. On its website Algonquin advised shippers looking to deliver gas northeast of Rhode Island to utilize gas from Tennessee, the Maritimes, or LNG at Everett, MA.

“The maintenance is scheduled through the 26th of September, and people are trying to figure out what is exactly getting through. The first day [Monday] is always the worst because you don’t know how to adjust, so you do what you think is going to work and then you make adjustments thereafter,” said an eastern marketer. “The weather is mild, so that’s probably why they did this in September. If you wait to October, it could be cold. Generally, we don’t make any greater margins on these types of price moves unless we take a position.”

The position to take Tuesday would have been as a seller. Quotes at Algonquin Citygates dropped 61 cents to average $3.91, and deliveries to Iroquois Waddington fell 13 cents to $3.34. Wednesday gas on Tennessee Zone 6 200 L tumbled 41 cents to $3.53.

At eastern points prices inched higher as forecasts called for temperatures to ease to slightly below seasonal norms. In Philadelphia AccuWeather.com predicted Tuesday’s high of 80 was expected to ease to 72 by Wednesday and 76 by Thursday. The normal high in Philadelphia at this time of year is 78. Gas for delivery Wednesday on Tetco M-3 added 2 cents to $2.92.

New York City’s Tuesday high of 76 was expected to ease to 72 on Wednesday and 71 on Thursday. The normal high in New York is 75 at this time of year. Wednesday deliveries to Transco Zone 6 New York gained 3 cents to $2.92.

Gas on Dominion was flat at $2.77 as temperatures in Cleveland were expected to fall below normal. Tuesday’s high there of 65 was forecast to rise to 72 by Thursday, below the normal high of 74.

At Midwest points next day gas was flat to lower. Deliveries to Alliance and Consumers were unchanged at averages of $2.94 and $2.99, respectively, but gas for Wednesday on Michcon was down 3 cents to $2.96, and gas at the Chicago Citygates was off by 3 cents as well to $2.90.

Futures traders aren’t expecting any rebound off Tuesday’s 9-cent loss. “The market still looks kind of soft. I don’t see anything that’s going to rally the market in the next day or two,” said a New York floor trader. “I look for the market [October] to trade anywhere form $2.70 to $2.80 in the next day or so. We’ll see what kind of [storage injection] number we get and go from there. Maybe we grind down to $2.70 by Thursday morning.”

Analysts are generally expecting a gas storage build to be reported this week much greater than last week’s report of 27 Bcf as gas production is restored in the wake of Hurricane Isaac and weather conditions moderate. Last year, 89 Bcf was injected at this time, and the five-year average is 73 Bcf.

Top analysts see the market looking for price drivers other than weather. “We are viewing [Monday’s] approximate 8-cent selloff as almost entirely weather-related as cool temperature forecasts across the eastern half of the U.S. have now been extended into next month, a development that virtually eliminates the [power generation] factor as a major driver of natural gas pricing,” said Jim Ritterbusch of Ritterbusch and Associates in a morning note to clients. He said there are also no tropical developments capable of market support.

“Given this lack of support from the weather factor, the magnitude of this week’s price decline appears orderly and leaves open the possibility of another renewed price upswing. The lows of last Tuesday have not been challenged, and most technical indicators are still sending off bullish signals.”

Tallies of forecast heating and cooling requirements confirm Ritterbusch’ viewpoint. In spite of weather outlooks touting above- and below-normal temperature anomalies for certain portions of the country, forecasts by the National Weather Service (NWS) show that for major energy markets both heating and cooling requirements are expected to be below normal.

For the week ended Sept. 22, NWS forecasts that New England will see 27 heating degree days (HDD), or 14 fewer than normal, and the Mid-Atlantic will enjoy just 16 HDD, or 13 fewer than normal. The Midwest from Ohio to Wisconsin is forecast to see 42 HDD, or 10 more than normal. Cooling requirements are anticipated to be almost nonexistent. New England, the Mid-Atlantic and Midwest should expect a total of 12 cooling degree days, or eight fewer than normal.

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