The overall cash market Wednesday on average slipped just over a penny, where large losses at Northeast locations were not quite offset by gains in the Midwest, mostly steady eastern quotes, and steady to slightly lower Texas next-day prices. At the close of futures trading November had managed a 3.3 cent advance to $3.470 and December had added 5.3 cents to $3.820. November crude oil gained 3 cents to $92.12/bbl.

Great Lakes marketers have been actively buying. “We have one customer who is a grain dryer, and October and November could be his heaviest months,” said a Michigan marketer. We have also been buying a little for storage, but there are injection limits this month. If conditions are like last year, you don’t necessarily want to fill up storage because the price might get better.

“You are always trying to get the best price you can get, but we paid $3.50 for gas on Consumers today [Wednesday]. It’s possible we might go into the winter not completely stored. When we get meter reads from our customers for the end of the month, it is likely to show less usage because of expected warmer temperatures.”

Higher next-day prices at Great Lakes points were the rule in Wednesday’s trading. Quotes on Michcon were 4 cents higher to average $3.49 and deliveries on Consumers added 3 cents to $3.48. At Chicago Citygate next-day deliveries added 6 cents to $3.44 and on Alliance quotes for Thursday gas came in 8 cents higher at $3.45. Gas at Dawn was flat at $3.61.

Next-day prices at Northeast points plunged as temperatures were forecast to warm. A year ago before Halloween the Boston area was cold and wet, but that is not likely this year, forecasters say. “Last year, Boston had an inch of heavy, wet snow two days before Halloween. In nearby Worcester [MA], more than a foot of snow smothered shrubs, cut off power all over the place and brought down trees,” said meteorologist Elliot Abrams. “Could it happen again? So far, there is no sign of any such thing. In fact, the warmup that will occur [Thursday], and Friday could be repeated early next week. There are signs of chillier weather around Halloween, but so far even that doesn’t look too drastic.”

AccuWeather predicted Wednesday’s high of 59 in Boston would rise to 64 Thursday and reach a toasty 71 on Saturday. The normal high in Boston this time of year is 61. In Worcester, MA, Wednesday’s high of 61 was anticipated to hit 64 Thursday before stretching to 65 on Saturday. The seasonal high in Worcester is 58.

Quotes on Algonquin averaged a 56 cent loss to $3.88 and next-day deliveries into Iroquois Waddington shed 34 cents to $3.93. Parcels on Tennessee Zone 6 200 L fell by 49 cents to $3.97.

Farther south, price declines were not as abrupt. Next-day gas on Dominion was down a cent at $3.29 and deliveries to Tetco M-3 were down a cent as well at $3.45. Gas into New York on Transco Zone 6 fell 3 cents to $3.43.

East Texas prices were generally flat to lower. Deliveries on NGPL TX OK were up a cent at $3.23. At the Houston Ship Channel Thursday gas was 3 cents lower at $3.20, and at Katy, gas was quoted 1 cent lower at $3.22. Deliveries to Transco Zone 1 lost a penny to $3.21 and NGPL S TX deliveries were flat at $3.24.

For the moment November futures have been holding technical support in the low to mid $3.40s, but that may change abruptly with the release of Energy Information Administration gas storage inventory data Thursday.

Analysts at IAF Advisors in Houston predict a build of 47 Bcf and a Reuters survey of 25 traders and analysts resulted in an average 48 Bcf with a range from 28 Bcf to 70 Bcf. Industry consultant Bentek Energy, utilizing its North American flow model, anticipates an increase of 53 Bcf. Last year a stout 106 Bcf was injected and the five-year average build is for 71 Bcf.

Analysts saw Tuesday’s soft performance as auguring another 10-cent decline.

“As nearby futures correct and potentially peel off another 10-11 cents relative to [Tuesday’s] settlement, we expect additional losses to be slowed by renewed short-covering from the large speculative entities that continue to show a preference for the short side of the market on a net basis,” said Jim Ritterbusch of Ritterbusch and Associates. “The technical landscape was vastly improved via last week’s advance into new high territory for this year. Since technical developments tend to go hand-in-hand with sub-surface shifts in supply-usage balances, we will continue to suggest gradual production slippage that will also be relinquishing year-over-year gains by next year.

“Also significant is the fact that a $3 handle in the physical market is still not significantly impacting the coal-to-gas substitution factor that was set into motion earlier in the summer when natural gas prices were teasing the $2 mark. These various items are tending to overshadow the static factor of a record storage level,” he said in a morning note to clients. Ritterbusch forecasts a 48 Bcf build.

Heating degree day (HDD) data alone suggests that Thursday’s inventory report may show a build that is somewhat less than the long-term average. Major energy markets endured significantly greater heating loads last week. For the week ended Oct. 13 the National Weather Service reported that New England had 121 HDD, or 29 more than normal, while New York, New Jersey and Pennsylvania endured 116 HDD, or 39 more than normal. The Midwest from Ohio to Wisconsin saw 133 HDD, or 53 more than its normal seasonal tally for this time of year. The five-year average storage build is 71 Bcf.

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