Modest to large gains in the Rockies and San Juan Basin ran counter to an overall trend Monday of price decreases that in only a few cases varied from a range of about a dime to 20 cents.

Moderating weather trends and a second straight sizeable screen downturn were the chief influences in the general bear market. “It sure didn’t take long for prices to go well below first-of-month indexes,” observed a Gulf Coast marketer.

Despite the fall in average prices at most prices, an eastern trader reported moderate rebounds in late deals. For example, he said Transco Station 65 started out well under $4, but “some storage injection demand” pulled it back above the $4 mark. Similarly, Chicago citygates struggled into the $3.90s after a weak beginning, he said.

With heating load this week unlikely to come near matching last week’s levels, and a further futures drop of nearly 20 cents, it seemed reasonable to anticipate that cash numbers would continue downward Tuesday. But at least two NGI sources weren’t so sure. “There’s no reason for prices not to keep falling Tuesday, but the market doesn’t always behave logically,” said a Gulf Coast trader. Noting that some analysts are predicting a net withdrawal in Thursday’s storage report, he saw a possibility of getting a modicum of support in the next couple of days.

And even with Monday’s big Nymex drop, a western marketer had some doubt about how much cash would follow the screen example. Because nearly all points had dropped “so far below index levels” Friday and Monday, he saw some potential for “a little rebound effect.”

But a bearish Midcontinent trader noted, “The whole of October was cooler than normal, and it is still cool out there, but not $4 cold. Starting in the four-buck range, that is fairly high, and the way the screen went out makes me think it is going to be soft tomorrow [Tuesday].”

And a producer had this take on the market: “Cash was pretty weak. I would have expected prices to be firmer on a Monday. Henry Hub stayed below $4 for most of the day, except for a short squeeze at the end. Our Tennessee 800 Leg average is $3.85, while Friday’s trading was 10 cents higher. Is the early winter already over?”

Although Rockies weather was starting to warm up from last week’s wintry conditions, it’s still cold enough in the region to create good demand there and in the San Juan Basin, a marketer said. She also thought San Juan-Blanco’s rise of nearly half a dollar Monday was at least partially a continuation of a big run-up in the basin during Friday’s late trading. Otherwise, there are no physical transportation constraints or supply outages to explain San Juan strength, the marketer said. Monday’s gain made San Juan-Blanco a rare point in trading substantially above the November index of $3.34.

Despite a Northwest Pipeline advisory about potential customer-specific entitlements (see Transportation Notes), a marketer said moderating weather in the Pacific Northwest was likely to render any such entitlement unnecessary.

New York City-based Weather 2000 offered this explanation of why an unusually cold October may have distorted bullish perceptions recently: “Whenever people experience a particular weather pattern for some time, especially one that is extreme and consistent, then any let-up seems to be exaggerated in people’s minds. This is quite analogous to a car driving along at 60 mph, increasing to 70 mph and eventually 80 mph for a while. If the car then slows down to 50 mph, everyone feels like the car is just crawling along, which is not the case. Similarly, there are temperature changes based on actual occurrences, and temperature changes based on relative perceptions.

“After a very cold October 2002 and commencement to November 2002, this relative perception is bound to exaggerate such matters. For those looking a cold autumn or cold winter, containing almost only very cold days, or with no warm days, it has never happened and never will happen.”

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