Traders not only talked about the weather Wednesday, but also did something about it: namely, sent spot prices skyrocketing by 30-60 cents or more in most cases. The biggest increases came at frigid Northeast and Midwest citygates, topped by gains of nearly 80 cents at Transco’s Zone 6-NYC pool.

The smallest advances of less than 30 cents came in the West, where winter weather was either less severe than in the East or practically non-existent in the desert Southwest and California.

This is the strongest prices have been all month in the Gulf Coast, one source said in reporting upticks averaging about 40 cents. It’s almost entirely due to “the first time we’ve had really cold weather that looks like it will stick around for a while,” he added. He noted that groundwork for the cash run-up was laid by Access futures trading that had left the January contract positioned slightly above the psychologically important $3 level when traders returned from the Christmas holiday Wednesday morning, although the screen retreated back into the $2.90s during the open-outcry session.

A western trader agreed that the Access strength had gotten cash started on its climb, but added that people started realizing not long after trading began that “these prices are too high.” Late quotes fell off about 15 cents from their early averages at both Malin and Opal, she said, adding that the weather was not especially severe in the West, “and it’s actually warming up in Southern California.”

Except for the West, though, this week’s blast of winter likely will last at least into early January. The latest six- to 10-day forecast from the National Weather Service shows below normal temperatures expected to remain throughout the U.S. east of a line curving from West Texas through the Central Plains and into Minnesota.

An aggregator said late Wednesday morning that he expects a general leveling off of prices today, predicting they will probably be trading from a nickel back to flat to the screen on the January contract’s day of expiry. “We’ve done most of the needed convergence [between December swing and futures] today,” he said.

However, the cash price mood was turning more negative by that afternoon. In addition to the price boost from weather, “we were coming out of a long weekend and some people had to balance short supply positions,” a Midwestern source said in explaining yesterday’s price strength. But he concurred with the western trader cited above that cash was dropping towards deadline, saying it was getting “awfully hard” to find any buyers about that time. Referring to the futures retreat in regular Nymex trading followed by further erosion in Access, he said, “Somebody apparently changed their mind this afternoon at the Merc. The rumor is that supposedly one large party had a number of $3 calls and once he got those taken care of, he got out of the market with nobody else to take his place. Then the bulls’ party was over.”

A trader reporting intra-Alberta numbers in the mid to high C$3.70s said that despite Canada’s Boxing Day holiday Wednesday, “If you were lucky enough to find somebody early, you could do some Aeco business despite the holiday.”

A marketer quoted Chicago citygates averaging nearly $3, up more than half a dollar, while his Midcontinent field increases were mostly in the range of 30-35 cents.

Bidweek activity was “still really slow” Wednesday, a Midcontinent trader said, and there was nothing to change last week’s outlook of extremely thinly traded January baseload. He couldn’t see much buying interest at all from utilities; “it’s mostly marketers shuffling gas back and forth among themselves so far. It looks like utilities and end-users are ready to start using their storage a lot more heavily next month.

The Chicago citygate for January was trading both flat to the NGI index and to the screen, a marketer reported. Barring any radical change in futures today, that would mean a rise of about 40 cents or so from NGI‘s December index of $2.42. Western markets appear to be not as strong; a regional source quoted Malin deals around $2.80, up barely a dime, and “roughly” in the low to mid $2.40s at Opal, up about 30 cents.

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