Riding the wave of a decidedly bullish storage report and a prompt-month futures contracts that settled above $5.00 on the previous day for the first time since late April 2001, prices wound up an already strong week with further advances at most points Friday. Only San Juan/Rockies numbers, which have frequently moved contrary to the overall market in recent weeks, succumbed to weekend softening.

But if traders had thought Thursday’s Nymex spike to as much as $5.15 was pretty awesome, they hadn’t seen anything yet, as show business people are wont to say. Although the eventual gain of 19.5 cents Friday was only about half that of a day earlier, its intraday peak of $5.53 had some gaping in near-disbelief. And because the screen had wavered on either side of flat for most of the morning before beginning its steep ascent near nominations deadline, its influence will not be felt much until Monday when cash prices likely will keep going up, a couple of sources concurred.

Heating oil futures also realized a large increase, and the crude oil contract, with a more modest gain, remained comfortably above $28/bbl.

Naturally there were pockets of resistance to increases, ranging from a little less than a dime at several points to more than half a dollar at Tennessee Zone 6. A Florida utility buyer had no quotes to offer, saying he didn’t need the gas that much, “and anyway it was too expensive for our taste.” Other traders quoted Florida citygates from the low to high $5.10s.

Another East Coast trader said his company “really got blindsided by that screen run-up.” People were calling him in a near panic to ask what they should do, he said. “I figured prices would crank down after NOAA [National Oceanic and Atmospheric Administration] came out late Thursday with that report that the El Nino effect would be stronger than previously anticipated.” He added that he wasn’t seeing anyone switching to fuel oil “lately,” but that it probably would happen if prices get over $5 for any appreciable length of time.

Henry Hub made a valiant effort to keep up with the screen by registering an increase of nearly a quarter to the mid $5.00s, but that still left it more than 20 cents shy of the Nymex settlement. And Columbia Gulf-onshore spiked as high as the $5.20s at the end of trading after starting as low as mid to upper $4.80s. A marketer who picked up a Columbia Gulf package near deadline at $5.15 said futures was just starting its skyrocket act at the time.

The screen’s volatility “is a good thing for us,” said a Gulf Coast marketer. He noted that according to the forecasts, a week of milder weather is coming up before it turns cold again, “but I don’t think anybody is counting on softer prices. After all, we got burned on the forecasts for last week.”

But a Midcontinent trader observed that the Midwest is supposed to be warmer by Monday, “so while technicals are pushing up cash, fundamentals are dropping the floor out from underneath the swing market.” In a similar vein, a Gulf Coast source commented, “If you had to buy gas today, you paid a premium. This was a technical-based rally. Once it broke though the barriers, the sky was the limit. Everything is going to reset itself come Monday. Spreads may widen, but since people are working off storage, fundamentals will be less important in determining the market than technicals.”

A western source said San Juan Basin and the Rockies defied the overall upward price trend because they were “way long on supply” and had little weather load to satisfy. And unlike other markets where quotes were rising in late deals, San Juan/Rockies numbers tended to fall, he said. “I was thinking San Juan-Bondad was priced right at around $3.80 until I looked up and saw the Blanco pool had fallen to approximately the same level.” He reported continuing to get “a lot of cuts on El Paso,” saying he had lost about 30% of his market Friday morning due to the pipeline’s nomination system quirks.

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