Weekend and Monday delivery of physical gas slipped 2 cents on average Friday. More points were positive than negative, and a balanced market was able to overcome steep declines at Marcellus points. Locations in the Midwest were able to land in the plus column and California points were mostly higher by a couple of pennies. At the close of futures trading, October had risen 3.9 cents to $3.677 and November was up by 4.3 cents to $3.755. October crude oil fell 39 cents to $108.21/bbl.

A change in Midwest LDC rules prompted buying in and around the Chicago area. “One of the LDCs changed the way they were allowing gas into their system. Nicor increased the amount of gas retail providers are allowed to bring into their system, and they tripled my load,” said a Houston-based Midwest marketer. “If they did that for everybody, then there were a bunch of people out buying gas, or they took a bunch of gas off the market because they didn’t have it to sell anymore. It certainly affected my book.

“It looks like they have their storage where they want it, and instead of buying gas for them to manipulate their own storage, you are now buying gas for your own load.”

Looking forward, the marketer said he had heard winter forecasts calling for weather that is “colder, drier, but with more snow. But how can you have a drier winter with more snow? It doesn’t fit.”

Weekend and Monday temperature forecasts in the Midwest were right at seasonal norms. AccuWeather.com reported that the Friday high in Milwaukee of 62 was expected to rise to 69 Saturday and ease to 65 on Monday. The normal high in Milwaukee is 65. Chicago’s Friday high of 64 was anticipated to reach 69 Saturday as well and 69 on Monday. The normal mid-September high for the Windy City is 69. In Detroit Friday’s high of 61 was expected to reach 67 Saturday and Monday. The seasonal high in Detroit is 68.

Gas for weekend and Monday delivery on Alliance rose a penny to $3.68 and packages at the Chicago Citygates added 2 cents to $3.69. Gas on Michcon was seen at $3.83, up 4 cents, and deliveries to Consumers rose a couple of pennies to $3.87. On Northern Natural Ventura weekend and Monday gas rose a penny to $3.64.

Points in the Marcellus were hard hit with weekend and Monday packages trading under $1. Transco-Leidy Line came in at 87 cents, down 77 cents, and on Tennessee Zone 4 Marcellus gas came in at 95 cents, down 65 cents.

Tennessee said on its website it was restricting flows Saturday and Sunday through Marcellus points Station 315 and Station 321.

West Coast locations managed for the most part to escape the otherwise soft overall prices and posted gains of a couple of pennies or more. Firm power prices helped. Gas for weekend and Monday delivery at the PG&E Citygates added 4 cents to $3.97, and deliveries to the SoCal Citygates added 2 cents to $3.80. At SoCal Border points gas changed hands at $3.64, down 4 cents, and on El Paso S Mainline gas traded at $3.75, up a penny.

IntercontinentalExchange reported that peak power at SP-15 for Monday delivery added $2.03 to $48.88/MWh, and peak power at Palo Verde rose $1.58 to $37.25/MWh.

Prices at other market centers hovered within a few pennies of unchanged. At the Henry Hub, weekend and Monday parcels added 3 cents to $3.60, and gas at the NGPL Midcontinent Pool slipped a penny to $3.49. Gas on El Paso Permian was flat at $3.48, and at Opal gas changed hands at $3.44, up 2 cents.

Futures traders see prices advancing another dime. “I thought we would get above $3.70, but we couldn’t quite get there,” said a New York floor trader. “I think we will come in strong Monday and test $3.75 to $3.80 by Tuesday. The market still looks firm and we’ll chase some more shorts out of the market.”

Other traders aren’t so optimistic. “The gains [Thursday] appeared related to an additional bout of speculative short-covering as many of the funds had been looking for a bearish figure to accept some profits out of short holdings,” said Jim Ritterbusch of Ritterbusch and Associates in closing comments to clients.

“Otherwise, the seasonal supply injection was only slightly above average and still managed to reduce the deficit against last year by 38 Bcf. Meanwhile, we also feel that the warm temperature forecasts looking out over the next couple of weeks combined with a more active storm activity in the Atlantic will keep short position holders on edge. Regardless, we still see some fresh selling next week capable of forcing fresh two-week lows, especially if weekend updates to the temperature views indicate any shift at all toward temperature moderation.

“All in all, [Thursday’s] storage figure and the market’s response thereto failed to change our near term bearish opinion. Any short holdings added in today’s trade on the advance to above $3.60 per nearby futures represent a hold with the $3.38 level representing a minimum downside price possibility. Stop protection would be advised above the $3.72 level close only. Any combination of bear spreads also should be held.”

The near-term weather pattern appears supportive. WSI Corp. in its Friday morning six- to 10-day outlook showed a broad fairway of above-normal temperatures extending from New England to South Texas and Montana to Arizona.

“[Friday’s] forecast is warmer in the Northeast compared to [Thursday’s] outlook; forecast confidence remains about average, though differences continue in the models with respect to the speed/intensity of a cold front next week.” Risks to the forecast include temperatures “end[ing] up warmer than forecast early in the week and cooler than forecast late in the week if the ECMWF [European model] is correct with it’s stronger/faster cold front in the Midwest/East.”

Of all the tropical activity Friday in the Atlantic and Gulf of Mexico (GOM), Tropical Storm Ingrid in the southernmost GOM had the greatest chance of impacting production infrastructure, but the risk was not great (see related story).