Countering Wednesday's trade where natural gas cash points came off across the board, Thursday's trade for the long Christmas holiday weekend proved to be the exact opposite.

Led by the Northeast with the largest gains, virtually all cash averages bumped higher on Thursday. In the Northeast, some spots, which had declined by more than $2 on Wednesday, gained back $1.50 to $1.85. Transco Zone 5 added more than $2 on Thursday after being the only spot in NGI's Daily Gas Price Index Wednesday to post a gain (1 cent).

"Wednesday's drops were pretty tricky to pin down," said a Northeast gas marketer. "A lot of people were struggling to get a handle on it. I think those large declines in the East might have just been an exasperated market bailing out."

However, on Thursday, the marketer told NGI he believed the weather was cold enough for traders to overlook the normally scaled-back demand that holiday weekends bring. "Largely what we saw on Thursday was that the traditionally reduced holiday loads that we're accustomed to seeing have been mitigated somewhat by some pretty cold temperatures, which are anywhere between five- to 10-degrees below normal across much of the Northeastern market area," he said. "I think we have a confluence of factors butting heads against one another, but all in all, I think you have to consider Thursday as a relatively strong day."

Transportation issues did not seem to be the culprit behind the run up in Northeast pricing. Other than some minor interruptible curtailments on Algonquin and Texas Eastern, there were no operational orders in effect for Friday gas flow on any of the main pipeline systems that serve New York City and New England.

A New York-based analyst believes the jump in pricing is merely the natural result of buying on Thursday for several days worth of winter weather. "It's not like you're buying for the Fourth of July weekend, when you know usage will be down. I think there's kind of an embedded option priced into trading today, because it's supposed to barely get above freezing [in New York] through Monday," he said.

The surge in Northeast prices drove the basket of Algonquin Citygate, Dracut, Iroquois Zone 2, Tennessee Zone 6, TETCO M-3, and Transco Zone 6 NY to an average basis differential over the Henry Hub to roughly $3.38 on Thursday. That is more than twice the average $1.44 basis at which that basket traded over the previous three Decembers. However, the absolute average price of that basket came in at $7.46 on Thursday, a full $0.16 below where those points traded over the three Decembers from 2007 through 2009.

When informed of those figures, the aforementioned New York analyst simply shrugged, "that doesn't surprise me at all. It's just further affirmation that the winter New England [gas] market is demand pull, not supply push or cost plus."

Elsewhere around the country, cash averages mostly added between a nickel to 14 cents Thursday after declining between 12 to 16 cents on Wednesday.

Those within the market hoping to see Thursday's price hikes bleed over to Monday will have to find support somewhere other than the natural gas futures arena. On Thursday, January futures declined by 6.9 cents to $4.083, despite the news that some revisions made Thursday morning's report of a 184 Bcf draw for the week ending Dec. 17 feel more like a 193 Bcf draw to the market (see related story).

However, the futures market has not been lending cash traders much insight recently. "The natural gas market remains on its price seesaw, up one day and down the next as the weather outlook vacillates," said Tim Evans, an analyst with Citi Futures Perspective in New York. "The temperature outlook does look somewhat more benign [on Thursday] although we note it will still be cooler than the warm five-year average for the period."

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