Weekend swing prices skyrocketed as high as $5.50 late Friday morning at Transco’s Zone 6-New York City pool. But as startling as that quote was, it wasn’t representative of the overall market in which price averages ranged from 35 cents higher (Zone 6-NYC) to 20 cents lower (PG&E citygate). Flat to slightly higher numbers predominated, and most of the softness came at western points.

Conventional wisdom on Thursday had been that between extreme futures weakness and the normal demand slump over a weekend, Friday’s prices would continue the sliding trend they had shown the day before. “I guess people must have decided it will be colder than they thought,” said a Midwest/Appalachian-oriented marketer in trying to explain why a majority of markets ranged slightly to either side of flat, but with some bias toward the upside. “Also, lack of liquidity played a part. It took quite a while to find a buyer for my TCO gas.”

Another source thought the general mild firmness likely was “a reaction back the other way. There was too big a price drop Thursday, and traders were adjusting somewhat.” He also noted that a firmer screen provided some guidance for cash. And a third source observed that few traders are willing to risk being caught short in a holiday period, especially when there’s severe winter weather happening (the metropolitan area of Buffalo, NY was virtually shut down Friday as a record 44 inches of snow was recorded at the airport measuring station, according to the National Weather Service).

Unlike Thursday’s declines as trading proceeded, prices were rising in late deals in nearly all markets, sources said.

Zone 6-NYC showed little inclination for price fireworks during much of the morning, being quoted at flat to moderately higher in the $3.30s and $3.40s in most deals. But then it spiked sharply to the $5.00-50 range near deadline, although very littled volume got traded at those lofty levels. An aggregator blamed the Linden, NJ bottleneck on Transco for causing the huge run-up, adding, “Of course, it’s still pretty cold up there, too.” A marketer concurred that some traders were unable to squeeze as much gas through Linden as they wanted. “I think somebody was trying to move IT or secondary gas and got cut, then had to pay up late” to get someone with firm capacity to provide the citygate gas they needed, he added.

In a Dec. 20 bulletin board posting, Transco had said 100,000 Dth/d of IT would be available through its Linden Regulator Station in Union County, NJ effective Dec. 24 until further notice. However, one source told NGI that due to the colder weather arriving in the NYC area, Transco was limiting secondary firm and interruptible services, and Linden IT capacity had dropped to 20,000 Dth/d as of Thursday. As recently as two weeks ago Transco had been allowing 400,000 Dth/d of IT through Linden, he said.

Gas crowding the PG&E system depressed western prices despite snow in the Rockies. PG&E projected that linepack would soar well above maximum target levels over the weekend as it extended a high-inventory linepack through at least Saturday (see Transportation Notes). Neighboring SoCal Gas did not issue an OFO, sources said.

January bidweek numbers were recovering by about a dime or more Friday in response to a double-digit gain in February futures, after having weakened considerably Thursday due to the January screen’s expiration-day plunge, a Gulf Coast/Northeast trader said. An industrial buyer affirmed that bidweek quotes were rising again, but he also had a perception of the February futures contract being “hyped.” The Farmer’s Almanac predicts a relatively warm February, he said, “and it is often more accurate than most of the weather forecasting pack.”

Several sources reported bidweek activity as still remarkably quiet. Usually traders leave little to be done on the final day, they said, but this time they expect an active day Monday because many people wanted to wait for the freshest weather forecasts possible before committing their January business. Also, a marketer noted, quite a few traders were absent on vacation this week, but would be returning to their offices Monday to do whatever bidweek deals were necessary.

Bidweek appeared to have more liquidity in its first month in the post-Enron era, a trader of the Chicago citygate commented. “People who previously would rely on Enron as their only counterparty were forced out into the market this month, and that made for more buyers and sellers. The split was about 50/50.” He anticipates a Chicago index in the low $2.70s and quoted basis at plus 8-10 cents.

Basis is especially strong at Transco Zone 6-NYC for January, as sources quoted a range of plus $1.65-2.05. A marketer said he was doing fixed-price deals Friday at the point for $4.80-5.15. In stark contrast was border-SoCalGas, only a year ago one of the most expensive markets around. Basis of minus 15 cents to plus 1 cent was reported for the border, with fixed prices being quoted in the $2.50s and $2.60s.

Bondad traded at only a few pennies’ discount to Blanco (both are El Paso pools in San Juan Basin) for much of bidweek, said a buyer, quoting a Blanco range of $2.30-40. However, he said his one Bondad deal at $2.20 tended to be lower because falling Rockies prices Thursday were putting pressure on the Bondad market.

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