Upticks by as much as about 70 cents at a few Rockies locations averted a clean sweep of declines in the cash market Friday. All other points recorded losses in bowing to the dearth of heating load in most areas. A dime-plus fall by January futures a day earlier and the usual weekend slump of industrial demand further weakened cash quotes.

Friday’s drops ranged from a couple of pennies to a little more than 65 cents. All but two were in double-digits. The Gulf Coast and Northeast tended to take most of the largest price hits.

Except in a large portion of the West, including Western Canada, relatively balmy temperatures for the middle of December were forecast for the weekend. The South would continue to see weather more resembling spring than just a week before winter’s official start. Although a stormy Pacific cold front that had roiled the Pacific Northwest earlier in the week would be proceeding into the Upper Plains and Midwest as the weekend progressed, regional temperatures were expected to average 10 to 25 degrees above normal ahead of the front, according to The Weather Channel. And the Northeast was due to see highs five to 15 degrees above average, the forecaster added.

With low of 17 in Denver and 16 in Cheyenne, WY forecast for Saturday, it was obvious that the West did have some heating demand to account for the Rockies firmness. Even the normally moderate California metropolises of Los Angeles and San Francisco probably had some furnaces being turned on with lows in the low- to mid-40s due Saturday.

Despite the market weakness, pipeline constraints going into the weekend were minor and mostly related to maintenance. Only MRT had an OFO-like constraint taking effect Saturday, and it was relatively mild (see Transportation Notes).

A 14.6-cent screen drop Friday and the continuation of widespread moderate weather are expected to make a potential price rally Monday unlikely.

Traders were still talking about the improbability of the cash market’s Tuesday-Wednesday rally despite weak weather load. “People must have been thinking that we’re in the cheapest month on the Nymex board [strip] for quite a while,” so anyone who had the space available may have been buying for storage injections, a Midcontinent producer mused. Otherwise, it remains all quiet on the trading front, he said, adding that pipelines are doing what they’re supposed to do and that’s move gas where it’s wanted.

Citigroup analyst Tim Evans reflected on why many analysts, including himself, considerably underestimated the storage draw reported Thursday by the Energy Information Administration. “Forecasting becomes more difficult with sharp week-to-week variations in the heating degree day accumulations, with Frontier Weather’s count jumping from 107 in the week ended Dec. 1 up to 186 in the week ending Dec. 8,” Evans said. “Then too, we’ve noticed that at extreme temperatures, natural gas heating demand no longer rises in linear fashion, but rather at a faster rate. In other words, all heating degrees are not created equal, and the incremental one degree at 10 degrees has a much larger impact than that same one degree at, say, 50 degrees. This change is easier to capture if the temperatures are more consistent from week to week, but is also more difficult to forecast with the more dramatic shifts in temperature.”

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