Prices continued to fall in most cases Friday based on limited weather-based demand in some regions, a growing lack of storage injection capacity and the drop of industrial load that accompanies a weekend market. Some points kept mixed price movement in play with gains that were largely derived from either cold weather or an end of storage and/or transportation constraints.

A majority of the cash market ranged from flat to down 59 cents. Gains ran as high as half a dollar and were concentrated in the West, where early-season heating load is starting to grow.

Thursday’s futures advance of 13.5 cents was unable to avert softness in most of the cash market Friday. Friday’s plunge of 33.9 cents by the November contract will make a cash rally more difficult to achieve Monday.

The low-pressure system off the coast of southwest Louisiana remained a nonevent for the most part, with its primary effect being to cool down parts of the Louisiana and Texas Gulf Coast. There were still no offshore shut-ins or evacuations being reported Friday as the system’s winds were considered too weak to pose any danger to oil and gas infrastructure. It was expected to make landfall near the Louisiana-Texas border late Friday or early Saturday.

Friday’s general softness occurred despite forecasts of Saturday highs in the 90-degree area in parts of the South and Midwest. But the desert Southwest, which has been the only real bastion of severe heat in recent weeks, was undergoing a rapid cooldown. Phoenix, which peaked in the mid 90s as recently as Thursday, was expected to see a high in the low 80s Saturday. Perhaps more surprising is that Flagstaff, AZ, in a mountainous area north of Phoenix, had a 26-degree low in its forecast for Saturday.

Heating load is surfacing in a large area of the West from the Rockies through the Pacific Northwest and Western Canada. For example, Cheyenne, WY, was predicted to hit the freezing level Saturday. Calgary was already seeing near-freezing temperatures Friday.

El Paso-Permian recorded Friday’s biggest gain due to the end of Department of Transportation inspections and other annual maintenance ending that day at Keystone Station on the pipeline’s Permian Low Pressure system. Capacity through the station, normally 733 MMcf/d, had been reduced to approximately 150 MMcf/d during the work.

The Florida citygate and production-area zones on Florida Gas Transmission fell even though the pipeline kept an Overage Alert Day in effect Friday. A significant loosening of the imbalance tolerance (see Transportation Notes) may have signaled to shippers that the alert was about to be lifted over the weekend.

Calling local weather “absolutely perfect,” a Midwest marketer said he and his colleagues were “amazed” at how strong cash prices have been. They had thought the market would have seen quotes tanking by now over issues with high storage levels.

Some of the pipelines and utilities are squawking about having little or no injection capacity left, but even with Friday’s overall retreats, spot prices are still up sharply from first-of-month index numbers, the marketer pointed out. “It’s baffling our traders; where is this gas going?” he asked rhetorically. There’s obviously a home for it somewhere, but his company just can’t figure out where, he added. The Midcontinent is experiencing a few minor pipe constraints, but nothing serious, he said.

A utility buyer in the South remarked that his company is now getting to an “uncomfortably” high level in its storage, presumably facing having to sell excess term supplies into a softening market. All it can do now is “wait for the cold weather,” he said.

A Calgary-based producer commented that even with Rockies prices either flat or higher Friday, they still were much weaker than the rest of the North American market. A partial outage of Cheyenne Plains is still hurting the Rockies market, keeping about 300 MMcf/d from moving out of the region, he said.

The producer said like others he was puzzled about prices not getting much weaker in the face of nearly full storage. However, he noted that in addition to some expansions, storage operators have been getting much more efficient in recent years in things such as compressor power and operational processes. He also thought that reports about interruptible storage customers having to empty their accounts can be somewhat misleading, saying it happens every year about this time at most single-cycle facilities and is factored into market in advance. Things can turn around quickly, though, he said, and the industry might still run out of injection space at some point.

The producer noted that Monday is Canada’s Thanksgiving, but those who trade U.S. points won’t get the day off. However, there will be a holiday for them when the U.S. Thanksgiving arrives, he said.

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