Some Midcontinent/Midwest points stayed flat Friday as a cold front was in the process of greatly enlarging its presence in the region, but the rest of the market saw varying degrees of decline ranging from less than a nickel to more than 40 cents.

Much like the day before, many of the larger weekend losses were recorded in the West; however, Northeast/Appalachian numbers that had been on either side of flat Thursday (along with a few significant drops) joined the West with plunges exceeding 30 cents Friday. The Gulf Coast had been close to flat Thursday but recorded drops of nearly a dime or more for the weekend; the trend was in the opposite direction at several Midcontinent/Midwest points.

Traders used weather forecasts and the usual weekend slump in industrial demand as their primary influences. The natural gas screen didn’t stray far from flat until after cash business had finished, when it eventually found a dime-plus lower resting place for the day. Nymex’s crude oil and heating oil contracts registered minor losses, with crude managing to stay above $30/bbl going into the weekend.

Frost advisories remained in effect through Friday night for parts of the Northeast, but a warming trend predicted for the weekend took a big hit on regional prices. The Midwest, which had remained fairly mild when the Northeast began chilling out at midweek, was starting to feel its own taste of winter as the weekend began. It’s cold, “but just light-jacket weather,” a trader in the Chicago area said. At least prices were headed in the direction one would expect with weather-related demand still relatively light, he added.

But a marketer said people in the central Plains and Midcontinent were pretty likely to be firing up their furnaces over the weekend as a cold just approached their areas. And last week’s Southern warmth would be yielding to well-below-average temperatures by the end of the weekend, according to The Weather Channel.

While saying data and final research were still being analyzed, Weather 2000 asserted that its predictions for a cold East and warm West for the last quarter of 2003 remained “steadfast and consistent with our original forecasts of such back in May 2003.” Calling it “August and December wrapped up into October” and apologizing for redundancy, the consulting firm said Thursday the warm West/cold East pattern “we’re witnessing this week, this autumn, and essentially for the past 12 months, is truly quite incredible.”

It noted that on one side, Phoenix had set consecutive high temperature records every day since the previous Friday “at a heat pace comparable to August, and on the other side of the nation you have gusty winds and afternoon temps only in the low 40s in New York (where temps should be in the low 60s) and with [snow] flurries in the suburbs. And in between, both geographically and temporally, there is volatility to the extreme that calendars are useless indicators of what to wear…[T]he scary thing is that we’re still two months away before snowpack jumps into the mix to jack the cold intensity and duration up a notch or two more.”

Weather 2000’s conclusion: “If you thought last winter arrived fast and furious, then this year is leaving those climate stats in the dust, and if you thought October-December 2000 was a fluke for the record books, be prepared for many of those records to be matched or surpassed.”

The trading community continued to discuss implications of the change in survey methodology by the Energy Information Administration and upcoming retroactive revision of weekly inventories (see Daily GPI, Oct. 24). One source thought it was “not a smart move on EIA’s part. It’s not fair to the market to do this at the end of injection season.”

A Midwestern utility buyer fretted that next Thursday’s first report under the new methodology, along with the announcement of revised volumes dating back to July 4, might skew the bidweek market. She noted that November futures would expire on the day preceding the report, and thus for all practical purposes there would be only one full day left for bidweek trading as people digested the EIA news.

Moreover, the buyer said, there is the potential for a “disastrous” Thursday afternoon. It’s unlikely, she conceded, but if the revisions brought formerly reported inventories down, it could cause a mini-panic over winter supplies. On the other hand, if a “really major” upward change is revealed, that could result in a price rout after a lot of November business was already completed.

Analyst Kyle Cooper of Citigroup said his initial estimation for this week’s storage report is for a build near 70 Bcf, which would compare with year-ago and five-year average injection volumes of “just 11 Bcf” and “just 36 Bcf” respectively.

Former Tropical Storm Nicholas was of little interest to gas traders as the 2003 Atlantic hurricane season entered the homestretch. It weakened into a tropical depression while remaining far out in the central Atlantic, and the National Hurricane Center said an early Thursday advisory was its last one on Nicholas. However, NHC was back Friday morning to report that an “area of concentrated thunderstorm activity south of Hispaniola” (the island shared by Haiti and Dominican Republic) showed signs of organization, but the system was expected to move over Hispaniola before any significant development could occur.

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