Eastern prices sank between a nickel and about a quarter Monday amid forecasts of unseasonably mild weather continuing into early November. Western losses tended to be small at a nickel or less and were mixed with upticks at several points as the region experienced both chilly weather from the Rockies through the Pacific Northwest and hot temperatures in California and the desert Southwest.

Prospects for a cash market rally appeared dim after November futures shed more than a quarter in value while nearing Wednesday’s end of their prompt-month reign. Nymex’s crude oil and heating oil contracts also weakened, with crude for December delivery settling below the key psychological level of $30/bbl as traders weighed talk of OPEC members considering a production increase.

There’s lots of linepack filling the pipes, said a Northeast trader commenting on rejections of due-pipeline imbalance makeups by Texas Eastern and Algonquin (see Transportation Notes). Some northerly parts of the region have daily highs in only the 40s, he said, but otherwise readings are ranging from the 50s through 70s, so heating load remains rather lackluster. Even without that factor, he said he would expect cash to go down again Tuesday due to the screen’s weakness Monday.

After trading at essential parity with the screen on Thursday ($4.91) and Friday ($4.78), Henry Hub registered a relatively rare premium of a few cents above Nymex Monday by falling less than the November contract’s 27.4-cent plunge.

Although Chicago citygates dropped nearly a quarter into the mid $4.70s, a marketer thought that market was strong enough to justify pulling storage to make sales rather than buying new gas. After all, he said, November prices are likely to be even lower around $4.70 (see below). Calling it “just a gut reaction,” the marketer said he anticipates an overall warm winter “to complete the cycle back to low prices, and then we’ll start going through the price cycle again.” He predicted a relatively cold front half of winter, “then a really warm back half when prices will get very weak.”

Northwest was another pipeline facing problems with excessive linepack (see Transportation Notes) despite a polar front bringing wintry conditions into its Pacific Northwest market area Tuesday. The front also may mark the end of recent record heat in the southern reaches of the West, according to The Weather Channel. In fact, record cold may be making regional headlines by the end of the week, it said.

A source said he had started “dabbling a bit” with November business, but didn’t have any reportable trades yet.

“A little winter” is finally making an appearance around Calgary, a producer based there said. He said some November deals were done Monday at NGPL Nicor (Chicago) on either side of $4.70, and that he was hearing an overall range of 4.65-74. He pegged Chicago citygate physical basis at plus 14 cents. Paper basis seemed to be getting stronger as the screen fell Monday, the producer added.

The budding bidweek looks very quiet and rather soft, a marketer said. Baseload demand appears to be pretty light based on the small amount of trading being done for November so far, he went on, pointing out that “warm weather forecasts and lots of storage” should prevent any major run-ups as bidweek proceeds.

Lehman Brothers analyst Thomas Driscoll is forecasting that Energy Information Administration will report a storage injection of 70 Bcf for the week ended Oct. 24. The 70 Bcf estimate compares with year-earlier and five-year average volumes of 11 Bcf and 36 Bcf respectively, and if realized would leave inventories at 3,098 Bcf, 74 bcf lower than last year and 59 Bcf above the five-year average.

The 2003 Atlantic hurricane season is winding up this week in a quiet fashion. The Weather Channel observed that a couple of mid-ocean non-tropical lows could gradually acquire tropical characteristics, “but there are no imminent threats of tropical cyclone development.”

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