With a new cold front already freezing the Midwest and similar conditions either moving into or approaching the South and Northeast, prices were on the rebound Wednesday everywhere except for a flat Iroquois Zone 2 and at Northern Natural-Ventura, which had been the sole stronger point the day before. Most gains were in double digits and ranged as high as 40 cents or so, but a few rose by only a nickel or slightly less.

Snowy conditions predicted Thursday for the Rocky Mountains and High Plains allowed Rockies points to share in the overall price firmness with some of the larger upticks, but much of the rest of the West will be relatively mild, according to The Weather Channel. The Southwest basins derived some extra price strength from heating demand in the Midcontinent/Midwest and intrastate Texas, where freezing overnight lows were due to extend as far as the Rio Grande Valley.

Many pipes either already have OFOs or similar restrictions in place, or will be implementing such orders (see Transportation Notes), or are warning of the potential for such action as in the case of Florida Gas Transmission. However, as a Houston-based marketer pointed out, a lot of pipeline constraints are happening because of the cold forecasts, but none appeared to be of a really serious nature.

Thursday is shaping up as one of the thinnest cash trading days ever. A significant amount of gas got traded Wednesday for flows through Monday due to many companies ignoring the fact that Nymex will be active Thursday — albeit on a shorter-than-usual schedule — and taking both Thursday and Friday off as Christmas holidays, sources said.

“Most of my customers bought through Monday,” said a producer who perceived it as mostly a mixture of utilities and marketers that will be off Thursday. Actually, she thinks it’s more a case of vacation days being used up than companies actually taking off for the holiday that will account for her expectations of more traders being absent than at their offices Thursday.

“I sold all of the gas that I had to through Monday, but will be available from home Thursday morning to help anybody that needs it,” the producer continued. She expects prices to come off Thursday since a lot of supply is already committed for the long weekend. Whoever’s got gas left Thursday probably will have a tough sell in an illiquid market, she said.

On the other hand, a Gulf Coast marketer said it was a hard call, but he would guess that prices will rise moderately Thursday because there should be enough heating load over the holiday weekend to outweigh continuing screen weakness and the fact that more businesses close for Christmas than at any other time of the year. January gas futures fell 3.6 cents Wednesday, largely ignoring massive weakness in Nymex’s petroleum products complex after a government report of increased crude oil and distillates inventories last week surprised analysts who had anticipated declines.

The marketer said he knew of at least one utility that will be off Thursday, but his trading counterparty there planned to come in and catch up on paperwork. Many marketing companies will work Thursday, but his was one of the exceptions, so he and customers did deals Wednesday effective through Monday. The marketer expects little volume in Thursday’s trading, which could exaggerate any price movement.

With so many trader absences expected, Thursday’s regularly scheduled storage report likely will have little impact until next Monday regardless of whether it exceeds or falls short of expectations. Citigroup analyst Kyle Cooper, who earlier had estimated a pull of 129-139 Bcf, said Wednesday afternoon, “We are going to do something we have rarely if ever done. We are revising our official estimation to a draw between 132 and 122 Bcf. Here is our dilemma. We employ a number of different models and then use a weighting factor to generate a final estimation.

“Some of the models that we have begun employing have limited history, but have been highly accurate over their short use. Quite simply, the difference between the older and newer models indicates a differential of over 80 Bcf. That is a huge differential and this week’s report has probably the lowest degree of confidence we have ever had. We could make a case for a draw near 100 Bcf, as indicated last Friday. We cold make a case for a draw of over 150 Bcf. Even with the revised estimate, we will actually feel relieved if the actual number is with[in] 10 Bcf of either side of our range.”

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