Cash market softness continued Tuesday as eastern weather moderates from the frigid holiday weekend conditions and western temperatures stay fairly benign except in several snowy mountain areas.

Nothing that would rally prices appeared to be in sight. January natural gas futures expired with a meager rebound of just over a nickel from Monday’s half-dollar dive. Nymex’s oil-related offerings saw relatively moderate gains.

Overall, most cash declines were smaller than those of the day before, with points outside the Northeast tending to slide between about 20 cents and a little more than half a dollar. However, the Northeast, where Transco Zone 6-New York City had been the only point falling more than a dollar Monday, had several other citygates joining in triple-digit losses Tuesday. The recent spate of cold is fading a bit more slowly in the Northeast than in other regions, as a winter storm that snarled traffic and air travel in the Boston area Monday will attest. But Boston was forecast to record a high in the mid 40s Wednesday.

One source noted that besides the milder weather trends, another current price depressant is the fact that virtually all schools are closed this week and many commercial and industrial businesses reduce operations between Christmas and New Year’s.

Pipeline constraints caused by last week’s blast of cold weather continued to ease as several OFO-like actions were in the process of being rescinded (see Transportation Notes).

Because the transition between months will occur Saturday, a day after the New Year’s Eve holiday, Wednesday’s trading will be for gas flows through the end of the month; then Thursday’s deals will be for the Saturday through Monday period. “It makes things a little tidier” to separate trading between the months that way, commented a marketer.

It looks like a softening market into the new year, said a Lower Midwest utility buyer reporting “pretty nice” temperatures around 45 degrees Tuesday afternoon. That may sound cold to some, “but we’re at least 10 degrees or more above normal,” he said.

The buyer said he did “just a few index deals” for January. He echoed the perceptions of others in saying this seems to be a pretty dead bidweek because a lot of traders are on vacation or extended holiday, and also because the hefty year-on-year storage surplus is translating into less buying of new supplies. “We have more in storage than we normally expect at this time of year,” he said.

A Northeast utility buyer said she wasn’t buying any baseload for January because her company had termed up all of its system needs for the winter.

Citigroup analyst Kyle Cooper said his final estimation for Thursday’s storage report calls for a withdrawal in the 173-183 Bcf range.

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