The blast of cold air that descended through the Midwest into much of the South at midweek last week would be waning to some extent during the weekend. So despite a moderate amount of prior-day futures support, the brief decline of heating load combined with the usual weekend dip of industrial demand to push cash prices lower across the board Friday.
Traders also might have considered that even though Thursday’s storage report came in below expectations, it was still an unusual triple-digit build for so late in the injection season and promised comfortably near-full inventories for the approaching heating season.
A large majority of Friday’s losses were in double digits as they ranged from a little less than a nickel to a little more than 20 cents. Transco’s Zone 6-New York pool took the biggest hit of all.
Line 300 in Tennessee’s Zone 4 dropped a little more than a dime to average approximately an even dollar, although the low-end quote was up from 70 cents Thursday to 75 cents Friday.
Although November futures were in the red for a while Friday, it appeared that afternoon that they might be able to eke out a small gain but instead finally wound up with a barely perceptible loss of 0.1 cent, providing essentially neutral guidance for Monday’s cash market (see related story).
Atlantic tropical activity was heating up a bit as the week ended, but there was still no threat to Gulf of Mexico production. The National Hurricane Center said a low-pressure area over the western Caribbean Sea had become better organized and there was a likelihood of it forming a tropical depression during the weekend. The agency gave the system 60% odds of becoming a tropical cyclone within the succeeding 48 hours. Meanwhile, another low-pressure area was about 350 miles east-southeast of Trinidad and was accorded only a 20% chance of tropical cyclone development.
Only a few sections of the U.S., mostly near the northern border, were still due to join much of southern Canada with lows in the 30s Saturday. Mild highs in the 70s and occasional 80s were forecast across much of the southern tier of states.
A Midcontinent producer attributed Friday’s lower prices to lessening weather-based demand combined with few storage options remaining. He confirmed the Oklahoma intrastate market being especially weak as chiefly due to an unexpected outage of Line 20 on Enogex’s East Zone (see Daily GPI, Oct. 21) just as a scheduled outage there was due to end. A lot of gas that had been targeted for Enogex transportation was getting shifted into OGT instead, he said.
Until earlier this month Florida had been of the few remaining hot market areas, but it’s now in a low-demand period after a series of cooling rains have pushed highs down into the 70s, a buyer in the Sunshine State said. Nothing was happening for the November bidweek yet, she said, but her company would be canvassing customers about what they’ll need early this week.
Despite prices dipping slightly more than a dime at the Opal Plant tailgate due to moderate to cool weather in California and much of the Rockies, Opal volumes traded on IntercontinentalExchange were up from 582,500 MMBtu Thursday to 613,900 MMBtu Friday.
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