Cash traders were hit with a barrage of bearish factors Friday as the weekend’s lack of gas demand combined with moderating temperatures and the upcoming Christmas holiday combined to push prices at points across the country lower.

The Northeast region once again led the declines, with a number of points recording $1-plus losses. Other areas such as the Rockies, Midcontinent and on the West Coast showed drops of a few pennies to as much as 13 cents. Louisiana and Texas point averages also got into the act, with most points dropping less than 20 cents.

“Prices were down a lot everywhere because of the lack of demand going into the weekend,” said a Northeast utility trader. “Temperatures really appear to be moderating at the moment. It is a little warmer in the Northeast and weekend loads combined with the fact that we have the holiday, really is doing a number on demand.”

Questions surrounding how traders plan to handle January bidweek still remain, with one Midcontinent trader referring to the process this month as a “unique experience.” With the New York Mercantile Exchange open both on Christmas Eve and New Year’s Eve this year, some traders said they will be available to make bidweek trades on both Mondays, but they don’t foresee much business getting done (see Daily GPI, Dec. 21). Others said their shops are closed. This year the last five business days of the month include Christmas Eve and New Year’s Eve, both of which are expected to be light bidweek volume days.

“Our company is treating both Christmas Eve and New Year’s Eve as holidays,” the trader said. “We’ve kind of sold our gas and we will come in on Wednesday and take care of stuff. With bidweek, we’ll have to do our stuff on the last day or so.”

Traders agree that weather patterns will tell the tale of where gas prices go next. If the expected January warm-up arrives on schedule, then prices will likely fall. However, if it turns out the forecasters got it wrong and cold reigns, then the cash market will likely show renewed strength.

Upcoming weather forecasts are bullish or bearish on gas prices depending on where you live. According to the National Weather Service’s latest six- to 10-day outlook covering Dec. 27-31, temperatures are expected to be above normal east of a line running from central Texas up through central North Dakota. A thin sliver of the middle of the country and Washington are expected to experience seasonal temperatures, while the West will see below-normal conditions for the period.

While the entire country seemed to be on the same page with Friday’s price decline, cash trading on the day didn’t exactly mesh with futures market action. The January contract had been moving in lock-step with Henry Hub cash most of the week, but that changed on Friday. Most months the prompt-month contract and the hub converge as expiration approaches, but that wasn’t the case on Friday. After being one-tenth of a cent off of each other on Wednesday, the January contract’s $7.190 close Friday was 16 cents below the Henry Hub average Friday of $7.030. The January contract expires Thursday.

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