Following a long holiday weekend in which severe winter weather in the East snarled transportation, left many without power and even brought a quite rare snow event to South Texas, the prospect for more moderate conditions this week resulted in price drops across the board Monday.

Declines were as small as about a quarter or so at a few western points because much of the region is slated to regain the title of chief repository of the nation’s coldest weather while the East warms up. A couple of New England points (Algonquin citygate and Tennessee Zone 6) also saw relatively small dips of about 20 cents because frigid mercury levels are persisting in the area. But in general, quotes dropped from about 30 cents to more than a dollar at Transco Zone 6-NYC, with most eastern markets recording dives of half a dollar or more.

Reflecting the approaching moderation in the East, quite a few pipes were canceling constraints that had been in place during the weekend due to the milder forecasts (see related story). However, El Paso and Florida Gas Transmission had OFO-like measures in effect. Weekend wellhead freeze-offs were reported in South Texas and West Texas, affecting production on three pipes but having relatively little market impact.

A marketer said she was on call during the weekend and had to re-source some Transwestern supply due to the freeze-offs in West Texas. “We got hit with quite a few” allocation cuts through Sunday but none Monday, she said.

The Zone 6-NYC plunge was highlighted by the point’s peaking at $8.70 Monday — nearly $5 less than its top quote Thursday for weekend flows. Tuesday’s highs would remain pretty cold in ranging from the teens in northern Maine to the 40s in the Mid-Atlantic, according to The Weather Channel, but warmer temperatures will prevail Wednesday.

“We’re still chilly,” said a trader in the lower Northeast, but prices were going down because of the milder forecasts. She said her company expects swing prices to keep softening into the new year. Bidweek dealing remained subdued because some traders were on holiday Monday, but she expects a lot of activity Tuesday when January futures settle. Her company “didn’t trade anything for next month ourselves, but we were hearing that everything was coming off along with the screen,” she said.

A futures plunge of just over half a dollar on its penultimate trading day left the January contract at $6.160, a whopping $1.816 below the December close at $7.976. Of course, the lofty December settlement had been hugely and artificially inflated by the now-infamous erroneous storage report on expiration day. The petroleum-related futures contracts were in free-fall mode, with crude oil for February delivery down nearly $3 to $41.32/bbl.

A marketer who trades Midcontinent and Southwest pipes said she only did a few deals, but had these January fixed prices to report Monday: Southern Star Central (formerly Williams), $5.65-75, Transwestern West Texas, $5.60; and Panhandle Eastern, $5.65-77. Obviously indexes will be coming down steeply, primarily as a function of weaker futures, she said.

Analyst Thomas Driscoll of Lehman Brothers expects a storage withdrawal of 165 Bcf to be announced for the week ended Dec. 24, which would be more than twice the comparable year-ago volume. Driscoll said his estimate includes lost demand based on the five-year average. “However, since the Christmas holiday fell on a weekend this year, we may have overstated the demand impact.”

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