Cash prices plummeted by about a quarter or more nearly across the board Thursday, ignoring an essentially flat screen during the morning that eventually eked out a gain of nearly 7 cents. The market rout had been signaled the day before by a futures dive in response to a larger-than-expected storage injection report, late retreats in Wednesday morning’s cash trading and reports of big drops in both on-line trading for Friday and and rest-of-month baseload numbers.

Sources were nearly unanimous in failing to detect any hints of near-future price strength. The litany of negative influences was familiar: seasonally mild weather, close-to-full storage, weak national and global economies, and the homestretch of hurricane season approaching with no tropical storm acitivity of any significance. “Only a long spell of really cold weather will boost prices again, and that doesn’t appear likely until sometime in November, if then,” one trader said.

The big rallies of Tuesday and Wednesday could only be carried so far by an analyst’s forecast of a colder than normal winter, a Midcontinent/Midwest marketer said, and the storage report canceled much of its effect (however, the NOAA lent further support yesterday to expectations of an unusually cold winter; see related story). “I’ve been expecting it [market] to come down for a while since the bullishness of last week,” he went on. “It’s cool in the Midwest, but not enough to get many furnaces turned on.”

The marketer sees almost no chance for a substantial rebound on the horizon, saying he thinks November prices “are going to get pummeled” during bidweek and in the aftermarket, too. There won’t be much demand for new gas then unless the weather turns much colder than expected at this point, he said. Gas probably will get so cheap next month that producing area buyers may elect to keep storage intact for a while and buy new supplies for current burns, he added. However, “many market area customers won’t have that luxury,” being under more or less rigid withdrawal schedules; but their use of storage will cut further into overall demand.

Presumably he anticipates a tremendous screen drop between now and settlement, since a Northeast trader pointed out that the November contract finished Thursday at $2.486, or about 65 cents above the October settlement. Basis also looks stronger for November than it was for the shoulder month of October, he said. Northeast citygates were trending mildly lower in late deals Thursday, he said, but TCO, which was “all over the map,” saw a late bounce of about a dime to $2.60. “I talked with several others about what was up there, but nobody knew of anything.”

Even a producer, whom one might expect to see the market in a positive light if anyone would, said, “We are bearish going into the winter, and see the market trading down another 20 cents over the weekend. The Nymex was spared today [Thursday], but will follow cash down tomorrow. After all, it’s the weekend,” with a normal dropoff in industrial demand.

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