After watching prices gyrate wildly for the last several months,traders were looking forward to a nice, quiet, last trading sessionof the year Friday at Nymex. After all, who would want to propelprices dramatically higher or lower in an abbreviated tradingsession just before the holidays? As a result, prices wouldprobably just chop lazily sideways, allowing traders the time tocatch up on paperwork, right?

Wrong.

In a fitting end to a year in which prices nearly quintupled,natural gas futures rocketed more than 5% higher Friday as traderslearned not only of a nor’easter bearing down on New England, butalso of a compressor station explosion late Thursday near the NewHampshire-Quebec border. The February contract received the largestboost, spiraling 51.2 cents higher to close at $9.775. Nearly asimpressive were the out months, which contributed to the price risethat enabled the 12-month strip to gain 18.6 cents to $6.129.

Although the outage resulting from the explosion that tore apartTransQuebec & Maritimes Pipeline’s East Hereford, QB compressorstation will only reduce flows by up to 20 MMcf/d, several traderssaid that it had a huge psychological impact on prices yesterdaymorning. By 11:00 a.m. (ET), the February contract had notched anew contract high at $9.93.

Also of impact Friday were forecasts calling for more than afoot of snow on Saturday in the major population centers ofPhiladelphia, New York and Boston. Physical prices reactedaccordingly with Transco Zone 6-New York climbing more than $4 tosurpass $25.00.

Looking ahead, Susannah Hardesty of Indiana-based EnergyResearch and Trading believes there is no significant sign oftopping action yet, and prices should continue to move higher.Culminating in what she calls an “Arctic High,” Hardesty looks forthe February contract to probe higher to test expected resistancein the $11.00-13.00 range between now and the middle of January.”Should prices finally peak at the upper end of this range, or atan even later time, it will impact the ability of the market tomove as low as I have projected for the Winter Low, and thoselevels will have to be raised.” Currently, she estimates that theWinter Lows will occur in the first quarter of 2001 on a move tothe $4.30 to $5.75 area.

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