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November gas extends losses amid ongoing fundamental pressure

Afterending a six-day winning streak with a 3.8-cent decline in the prior session to a settle at $3.237/MMBtu,November natural gas futures remained deflated overnight ahead of the Wednesday,Oct. 12, open, as bearish fundamentals that argued for weather-related demand weaknessand an uptick in the rate of weekly injections continued to weigh on values.At last glance early Wednesday, the contract was down 5.2 cents to $3.185/MMBtu.

NationalWeather Service forecast maps for the six- to 10-day and eight- to 14-day periodscontinue to show above-average temperatures prevailing across the country, savefor portions of the West, where average to below-average temperatures are indicated.

Lingeringabove-average temperatures dominant in outlooks are expected to generate only lowerhigh temperatures given the time of year that should keep any residual cooling demandsubdued, while the limited scope of below-average temperatures suggest that significantheating load will be kept at bay.

Tepidshoulder-season demand should allow for natural gas to flow more heavily into undergroundstorage facilities, allowing for the pace of storage-building to accelerate afterremaining lackluster throughout much of the refill season to date.

Inventoriesare poised to notch its largest build of the season when the U.S. Energy InformationAdministration releases its next weekly storage data on Thursday, Oct. 13, thatwill cover the week to Oct. 7, as preliminary estimates call for an addition tostocks in the high 80 Bcf range. This would compare against the 97-Bcf year-agoinjection and a 92-Bcf five-year average build.

The largestbuild of the refill season thus far was the 82-Bcf addition to stocks reported bythe EIA for the week ended May 27.

In itslatest storage report, the EIA outlined an 80-Bcfinjection for the week to Sept. 30 that went down as the second-largestbuild of the refill season to date. It took total working gas stocks to 3,680 Bcf,or 74 Bcf above the year-ago level and 205 Bcf above the five-year average of 3,475Bcf.

Lookingto the tropics, the now-upgraded Hurricane Nicole was last eyed about 360 milessouth-southwest of Bermuda, packing maximum sustained winds of 90 mph as it moveswestward at 2 mph, according to an 11 p.m. ET Tuesday update from the National HurricaneCenter. Nicole is forecast to approach major hurricane status late Wednesday, withthe center of the weather system expected to approach Bermuda late Wednesday andpass near Bermuda on Thursday. Nicole presently poses no threat to either the EasternSeaboard or the Gulf Coast.

In cashtrade, varied demand expectations conspired with the recent volatility at the futurescomplex to drive choppy price activity for natural gas booked Tuesday for Wednesdayflow.

Lossesprevailed across the major hubs. Day-ahead gas prices at Transco Zone 6 NY crumbledby about 29 cents on average to an index at $1.062/MMBtu, as hub action at PG&EGate slumped by 4 cents in deals averaging at $3.440/MMBtu. Cash gas pricing atthe benchmark Henry Hub floundered by roughly 1 cent to average at $3.166/MMBtu,as next-day gas price activity at Chicago defied the wider decline with a better-than-10-centincrease to an index at $3.098/MMBtu.

Regionally,the upside was dominant. Northeast spot gas pricing advanced by roughly 1 cent toan index at $1.820/MMBtu, as West Coast next-day gas price activity deflated bynearly 5 cents against the broad uptrend as it averaged at $2.799/MMBtu. Gulf Coastday-ahead gas prices rose by about 2 cents on average to an index at $3.012/MMBtu,as Midwest cash gas price action logged a scant less-than-1-cent gain in tradesaveraging at $2.967/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.