Weekend prices shot up as high as a little more than 40 cents (Transco Zone 6-NYC) Friday as traders heeded forecasts of seriously colder weather in several market areas early this week. The previous day’s screen gain of 20.3 cents added to the overall bullishness, a couple of sources said.

Double-digit gains reigned throughout eastern markets, but smaller upticks and a few flat or slightly declining points were observed in the West, which is slated to yield its title as repository of nearly all of the lowest temperatures so far in the heating season to the East this week. A high-linepack OFO by SoCalGas and a bulletin board warning about excessive linepack by Kern River (see Transportation Notes) helped to restrain the strength of western prices.

The Northeast was due to feel quite chilly during the weekend, but not to experience the worst of a cold front until Monday, while Midwest and Plains states could expect a windy cold front by Sunday, according to The Weather Channel. And after last week’s quite mild conditions, the South could brace for much lower temperatures late Sunday and Monday, it added. Although a Pacific cold front was forecast for the Pacific Northwest Saturday, much of the West can anticipate a general warm-up this week.

For a while it looked Friday as if the screen would continue to provide technical support for the cash market. But after a stay in positive territory during the morning, natural gas futures were dragged lower by nearly a nickel by the sharply dropping oil-related contracts. Crude oil for January delivery shed nearly $2 to below $41/bbl, its lowest settlement in four months. News reports cited the decision of the Organization of Petroleum Exporting Countries to maintain its existing production quotas as soothing to oil traders’ supply concerns, even though OPEC also announced that it would try to eliminate about 1 million bbl/d of excess over-quota output.

The Calgary area was symptomatic of the coming western warming trend. A producer noted that local temperatures had been around zero early last week, but had moved considerably higher into the 30s Friday afternoon. He said he observed thin staffing at quite a few trading offices as people took holiday vacation days or prepared for Friday Christmas parties. The producer thought much of the weekend price strength depended mostly on Thursday’s “pop higher at Nymex.” He reported doing quite a few Chicago citygate deals for Monday-only flow because the return of industrial demand lost over the weekend would be combining with much more frigid weather then.

A marketer speculated that “it might be the damp weather” more than low temperatures that had people turning up their furnaces in the Midwest. His area was around 37 degrees Friday, but predicted to be in the 20s this week. “It will be looking a lot more like real winter [this] week than it has up to now,” he

Although the reaction to Thursday’s storage report was muted in contrast to the furor associated with the previous two reports, the marketer said he thinks some people have doubts about even the latest report. It may be hard for EIA to ever regain the trust of those who got burned especially badly during bidweek, he said, adding, “Think of how badly it must have hit the energy budgets of giant industrial corporations like General Motors.”

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