The post-Christmas cash market saw a mix of price movement that was largely weighted toward moderate declines. A few small upticks were scattered here and there, but a majority of points ranged from flat to down a little more than 20 cents (Northwest-Sumas).

Several sources are looking for across-the-board softness to reign Friday. “Prices were really dragging today [Thursday], and the weekend [drop in demand] factor and the big Nymex plunge practically guarantee bigger cash declines Friday,” a Northeast utility buyer said. However, he thinks people will start buying more new supplies now that prices are falling in order to preserve their storage for use next month. He noted that Northeast temperatures around freezing “are fairly average for this time of year.”

Natural gas futures for January dropped 18.4 cents to settle below the psychologically important level of $5 Thursday. Their weakness came even as the crude oil contract for February (January has already expired in that commodity) tacked on a little more than half a dollar to settle at $32.49/bbl, hitting a two-year peak of $32.73 along the way. Heating oil also strengthened further as a report of an increase in U.S. oil inventories last week was offset by the Venezuelan strike and war worries in Iraq.

A Midcontinent marketer found Thursday’s market “pretty dead” because of a lot of traders being still out on holiday. The screen kept falling after cash business was finished, he said, so that’s a pretty strong hint of weekend price drops. Besides, he added, the weather forecasts for next week are fairly bearish, which “probably will keep both swing and late bidweek prices soft.” The market noted that what had previously been a wide January-February screen spread of nearly 15 cents was down to 3 cents Thursday.

A Southwest trader found prices tending to fade as the morning proceeded, but especially so in El Paso’s Permian Basin Keystone pool. However, he thought a late Keystone purchase in the mid $4.40s, about 20 cents under initial levels, probably went so low “because the guy pretty much couldn’t find anybody else to take it.”

Trading at points related to Canadian supply remained thin because of that nation’s Boxing Day holiday. However, a marketer quoted intra-Alberta deals averaging about a dime down to the mid C$6.20s.

A producer said most of the estimates he was hearing for Friday’s holiday-delayed storage report were a withdrawal range of 105-110 Bcf, but added, “I’ve got a feeling it will be a little higher, maybe 120 [Bcf].”

A western trader reported seeing some balkiness among California utilities over high gas prices lately, saying they were withdrawing 1-2 Bcf/d at times from storage. He suspects that they may be setting themselves up for another energy crisis next summer because hydropower is going to be low again.

A marketer was fairly typical in reporting that he had already finished January business due to the expectation that a lot of traders wouldn’t be in their offices this week.

An eastern utility buyer said she was going to great efforts to do some fixed-price deals for January Thursday afternoon, “but it seems like everyone insists on indexing.” She went on to note that it’s hard to see how indexes can be set if the market is nothing but indexed trading.

Scattered quotes of January physical basis included Florida Gas Transmission Zone 3 at minus 1 cent (“stronger than many,” the source commented), Tennessee Zone 0 at minus 24 cents, and Panhandle Eastern at minus 32 cents.

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