Losses of a dollar or more were common in the cash market Thursday as forecasts for some moderation of cold weather in northern market areas and Wednesday’s screen decline of just under 30 cents caused all points to plunge Thursday. A bearish storage report and further futures weakness are expected to extend cash market weakness into the weekend.

Overall declines ranged from a little more than half a dollar to about $1.20, but only one point was less than about 70 cents lower. The losses were remarkably consistent across all market areas.

“Prices are tanking,” said a Gulf Coast producer who reported Henry Hub trading around $13.90, down nearly 80 cents from Wednesday, and Transco Zone 6-New York City diving well over a dollar into the low $14.80s. “That’s still pretty good value” for producers with prices well over $10, even though they were moving much lower Thursday, he remarked.

Although the Midwest and Northeast continued to experience frost and/or snow showers in some sections early Thursday, forecasts for somewhat milder temperatures Friday and through the weekend in those regions was cutting back the heating load that the market had been seeing earlier in the week. The rise in temperatures will be fairly small but enough to make itself felt in the gas market, the producer said. Prices started out lower and fell further before getting “a little bounce of a nickel to a dime” at one point, he added, but they never got even close to Wednesday’s numbers.

The producer said he was not doing any November fixed-price deals Thursday morning, but both index premiums and basis were getting softer.

The South will continue feeling chilly at night but fairly comfortable during the day, while most western cold will remain confined to the upper mountain elevations this weekend. Northeast temperatures are expected to stay five to 10 degrees below normal until a warming trend begins Sunday, The Weather Service said.

In announcing a storage injection of 77 Bcf for the week ending Oct. 21, the Energy Information Administration handily surpassed prior estimates that had centered around the low to mid 60s Bcf. Although some had argued in advance that with the traditional injection season so near its end the report would be essentially meaningless no matter how well or badly it matched up with expectations, the screen took a decidedly bearish view. While November natural gas was as low as $13.30 at one point, the contract ended up expiring at $13.832, down 20.8 cents on the day.

Following the screen’s Tuesday spike of $1.334, its decline over the past two days was welcome to a lot of people, “especially those who like volatility and those who want lower prices,” said Peter Bryant of TBC ConFuels in Houston. However, he had “a bad feeling” about futures being able to remain lower and thinks the new prompt-month contract for December will challenge the $14.75-15.00 range again in the next couple of weeks. Bryant said he thinks a lot of people are still short in futures, “and it seems like something always happens just at the right time” to push the screen higher. He said he is doing virtually all November baseload deals at index, adding that it was easy to find supply that way.

The recovery of Gulf of Mexico production from hurricane-related outages advanced almost imperceptibly by less than 4 MMcf/d. Minerals Management Service (MMS) said it counted 5,559.24 MMcf/d in remaining shut-ins Thursday, down a paltry 3.91 MMcf/d from the day before. Evacuated platforms were unchanged at 228, but 10 more mobile drilling rigs were restaffed, lowering that tally to seven, MMS said.

A record-setting Atlantic hurricane season showed that it’s not ready to hang it up yet with the formation of Tropical Storm Beta in the southwestern Caribbean Sea. Beta is the 23rd named storm of 2005. The National Hurricane Center expected it to become a hurricane late Thursday night or Friday, but Beta is unlikely to threaten Gulf of Mexico production, being forecast to make landfall in Nicaragua.

©Copyright 2005Intelligence Press Inc. All rights reserved. The preceding news reportmay not be republished or redistributed, in whole or in part, in anyform, without prior written consent of Intelligence Press, Inc.