The market astonished many traders with its show of weekendstrength Friday. They had anticipated that a week of falling priceswas about to reverse, but few if any were looking for much morethan flat numbers at most points. Instead, only small declines atStanfield and Kingsgate differed from increases ranging from about20 cents in the Rockies to triple digits in California.

There was debate over which was the biggest factor in theturnaround: two straight days of futures firmness or temperaturesthat were turning out to be colder than expected in severalregions. “I think it was mostly the second day of screen strengthpushing cash higher,” a marketer said. “I see some colder weatherin the Southeast, but not that much change elsewhere.” On the otherhand, another source dismissed the screen as only a minor influenceon cash recently and instead pointed to weather that was producingsnow in parts of the West, Midcontinent, Midwest, Northeast andSoutheast.

In contrast to the snow south of the border, a Calgary tradersaid the weather there would be “very nice through the weekend withtemperatures of about plus six to seven degrees Celsius.” Butintra-Alberta prices followed the screen as usual and joined theoverall bullishness with a rise of about C50 cents to the C$9.70area, he said.

One marketer agreed that prices rebounded much more stronglythan he expected, but thought the bounce had some extra momentumfrom them “falling so far and so fast” in the five precedingtrading sessions. But he and others observed that once again thetrend in late deals was downward. “Things started strongly butfizzled late as it got hard to find buyers either at the citygateor in the field,” said a Texas-based source. “I think some peopleoverestimated the weather changes.”

By far the 800-pound gorilla of Friday’s market was the SouthernCalifornia border with a gain of more than $4.00 on average and a peakquote of $17. Obviously the state, even with no new blackouts Friday,needs as much gas as it can get, observed a western trader. But itwas the SoCal Gas shift to 70% daily balancing approaching Sunday (seeDaily GPI, Jan. 19) that caused such ahumongous advance, he said. “It made sense to short the pipe every nowand then previously when it [balancing] was 50% and spread over fivedays. Obviously now it doesn’t [make sense]. A lot of people probablygot nervous and went longer than 70% just to make sure they would notbe penalized. Next week when they get more comfortable with the 70%rule, you probably won’t see such huge border run-ups.”

A marketer doesn’t see any new big downturns looming at leastfor the near future, saying, “I’d rather be long in this marketbecause we’re only about half-way through the winter.”

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