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November gas deflates ahead of week's opening session

Aftersurging by 14.4 cents to a settle at $3.193/MMBtu ahead of the weekend, Novembergas futures recoiled in overnight trading leading up to the Monday, Oct. 10, open,as profit taking following a five-day winning streak conspired with a dearth ofsupportive fundamentals going forward.

At last look, November natural gas futures were trading at $3.158/MMBtu,down 3.5 cents on the day.

Activityin the tropics no longer poses an immediate threat to either natural gas productionon the Gulf Coast or demand levels along the Eastern Seaboard.

The pre-weekendsession saw what-was-then Hurricane Matthew's lack of significant impact on powerinfrastructure result in far fewer customer outages that allowed for firm naturalgas consumption for power burn that kept futures elevated, but the weather systemhas since been downgraded to post-tropical cyclone status.

Meanwhile,the National Hurricane Center continues to monitor another weather disturbance,Tropical Storm Nicole, which was last located about 545 miles south of Bermuda,packing maximum sustained winds of 65 mph as it moves northward at 2 mph, accordingto an 11 p.m. ET Sunday, Oct. 9, update. Nicole was seen reaching hurricane statusby Monday night, but steering clear of the U.S. East Coast over a five-day period.

Furtherahead, National Weather Service outlooks for the six- to 10-day and eight- to 14-dayperiods show the bulk of the country encompassed by above-average temperatures,likely to equate only to lower high temperatures given the time of the year thatwould not drive any significant cooling demand.

In itslatest "Natural Gas Weekly Update"covering the week to Oct. 5, the U.S. Energy Information Administration reportedthat total U.S. gas consumption notched a 4% decline week on week, driven by a 14%drop in power burn, despite lingering above-average temperatures across the bulkof the country.

Diminisheddemand should free natural gas for storage building, allowing for a further improvementin rate of weekly injections, after the EIA outlined what has thus far been thesecond-largest build of the refill season in its most recent inventory data.

The Oct.6 storage report detailed an 80-Bcfinjection for the week to Sept. 30 that took total working gas stocksto 3,680 Bcf, or 74 Bcf above the year-ago level and 205 Bcf above the five-yearaverage of 3,475 Bcf. The build was below both the 95-Bcf five-year average additionand the 96-Bcf injection seen in the corresponding week in 2015, but was above theaverage anticipated 70-Bcf injection.

Onlythe 82-Bcf addition to stocks outlined for the week ended May 27 bested the week'sdata throughout the refill season thus far.

In cashtrading, price action for natural gas booked on Oct. 7 for Saturday-through-Mondayflow unraveled in much of the country, as the typical weekend inclusion in the revisedoffering and weather fueled anticipation of weaker demand.

Lookingat the key hubs, a near 5-cent decline drove PG&E Gate spot gas pricing to anindex at $3.361/MMBtu, as a 4-cent slump took Transco Zone 6 NY day-ahead gas priceactivity to an average at $1.010/MMBtu. An almost 3-cent retreat brought Chicagohub action to an index at $2.857/MMBtu, as a near 2-cent decrease nudged benchmarkHenry Hub cash gas pricing to an average at $3.020/MMBtu.

On aregional basis, West Coast next-day gas price action shed roughly 6 cents on thesession to average at $2.688/MMBtu, as Northeast cash gas prices tumbled by almost37 cents on average to an index at $1.478/MMBtu. Midwest spot gas pricing notchedan 8-cent reduction in deals averaging at $2.789/MMBtu, as Gulf Coast day-aheadgas price activity fell by about 4 cents to an index at $2.818/MMBtu.

Marketprices and included industry data are current as of the time of publication andare subject to change. For more detailed market data, including power andnatural gas indexprices, as well as forwards and futures, visitour Commodities Pages.