Finding only modest heating load outside the West, and pressured by the screen’s drop of slightly more than 60 cents the day before, swing prices for the weekend plunged Friday. Losses ranged from about C25 cents for intra-Alberta gas to a little more than 90 cents at the Algonquin citygate; nearly all were half a dollar or more.

The industrial demand slump that accompanies a weekend also contributed to the softness.

Befittingly, as the only region with weather that genuinely indicates the winter heating season has arrived, the West had most of the smallest declines. The largest ones were clustered in the Northeast despite a cold Canadian high-pressure system that was forecast to move into the area Monday.

Cash-screen convergence was starting to suffer again, although not nearly by the multi-dollar spreads seen in late November. Henry Hub, which had traded only about 12 cents below January futures Thursday, dropped by more than 60 cents Friday while the screen shed a minuscule penny and a half. That left the Hub at a discount of about 75 cents from Nymex’s settlement level.

A utility buyer in the Lower Midwest typified the market weakness, saying his area would be enjoying a nice weekend with daytime temperatures around 50 degrees. “It might be a good time to go golfing, he suggested, adding that his company’s weather-driven load is “way below normal” for early December.

A Houston-based marketer who trades the Chicago citygate said buying activity there was sparse. He looks for continuing softness, saying he doesn’t see “any weather that will be significant” before the middle of this week, and even then it will be “just a little cooler,” which he considers unlikely to be enough to rally prices.

The stress of the storage fiasco may have gotten to some traders, since several had already left their offices by mid-afternoon. One who was still hanging around said that to him the “goofy thing” about the whole situation is that EIA doesn’t seem to analyze the storage data as much as it they should. He contended that those who prepare the report should be better able to spot it when something is out of whack. Traders who rely on degree days for their estimates have said all along the report was impossible.

However, he said he doesn’t “feel all that sorry” for the end-users complaining about being cheated by the storage error and the screen spike it generated. They could have done fixed-price deals on the Monday and Tuesday before Thanksgiving, when gas was already trading below November indexes, he said. Alternatively, they could have set up basis deals that triggered before the last-day settlement, he argued. Or they could have indexed, he concluded. In the case of NGI‘s Chicago citygate index, they would be getting their gas for about 80 cents less than in November.

One source found it hard to understand why the market reacted so frantically to the Nov. 24 report. After all, everybody looked at the number and immediately thought, “No, that can’t be right,” he said. Some people are arguing that a 49 Bcf pull could have been plausible because several storage operators require customers to take gas out fairly steadily throughout the winter, whether the customers want to withdraw at this point or leave it in their accounts, the source noted. “But when you take gas out of storage when there’s no demand for it, you’ve either got to sell it to someone who can take it back into storage or put it up for grabs, which it seems would have created much greater softness than what we actually saw in the week ended Nov. 19.”

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