In what was often characterized as a quiet trading day, prices were flat to mildly higher Tuesday in the East and moderately softer at most western points. Gains were capped at 5-6 cents, while Rockies and San Juan Basin declines of about a dime topped the losses.

After falling more than 12 cents Monday, natural gas futures recovered nearly a dime Tuesday, but did it too late to affect cash prices materially. The crude oil and heating oil contracts showed very little movement.

Weather that is colder than what had been expected continued to account for the mild strength of eastern markets. However, the National Weather Service wasn’t terribly far off last week in predicting above normal temperatures for the Midwest and Northeast this week, one source said. “Instead, what we’re getting now is pretty much seasonal norms,” he said, which are enough to generate a fair amount of heating load.

Florida, one of the last bastions of warm weather remaining, was already cooling off in the northern part of the state by lunchtime Tuesday from an advancing front, a utility buyer said. She didn’t hold out much hope for the cooldown affecting Florida Gas Transmission’s Overage Alert Day notice (see Transportation Notes), saying, “They’ll probably just say they need to keep it because now it’s gotten too cool.” A continuing outage of Matagorda Offshore Pipeline System deliveries into FGT’s Zone 1 (see Daily GPI, Nov. 12) didn’t hurt firm baseload purchases since suppliers just re-sourced elsewhere, the buyer said, but her company did lose a swing package from MOPS over the weekend that had to be replaced onshore.

A western trader detected a moderate rising trend at some points, reporting early Malin deals in the mid $3.50s and a later one in the low $3.60s. However, he was having to deal with returned gas elsewhere. The trader had about 35 MMcf/d of San Juan gas on El Paso sent back because East of California utility buyers, who had been trading through Tuesday on Friday because of the Veterans Day holiday, found they didn’t need as much as they expected, he said. “I think we had been supplying heating load, but it was warming up in the desert Southwest.”

The trader said Northwest was cutting for overnominations Tuesday at Opal Hub, indicating to him that production problems with excess water at the upstream Jonah Field had been resolved. Rockies traders were being careful about their nominations into CIG because compressor station maintenance was cutting 20-30 MMcf/d of capacity, he said.

An eastern marketer said he was hearing of a lot of industrials already preparing to ramp down production for the last few days of November, “so the market should be pretty soft then unless the weather gets really cold again.”

New York City-based Weather 2000 had something of a price-bullish rebuke for what it calls “Warm Forecasters” Tuesday: “Forgetting our latest forecast for the moment (which by the way anticipates more cold), let’s look at the recent past. ‘Warm Critics’ or ‘Warm Forecasters’ might lead you to believe that the mild spell has now made November 2002 a warm month. Yet an examination of the climate record shows this is completely false. Month to date (11/01/02-11/11/02; which includes the Indian summer episode over the weekend), actually has above normal HDDs [heating degree days] (net cold) for Chicago, Cincinnati, New York and almost every other location you can find in the eastern half of the nation.

“The fact of the matter is, all of the last three weeks of October were cooler than normal, the first week of November was cooler than normal, the second week is cooler than normal, the third week will be cooler than normal, and so on. Eventually we will see an above normal week for major hubs, but it hasn’t happened east of the Mississippi since early October, and likely won’t happen at least into Thanksgiving week.”

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