Prices acknowledged the falloff in weekend demand and widespread Chamber of Commerce-like weather by continuing to slump Friday, but late rebounds were strong enough to astound more than one trader. There wasn’t much consistency in the declines, which ranged from about a nickel or less at a few Gulf Coast, Midcontinent/Midwest and Pacific Northwest points to about 35 cents at OFO-plagued PG&E-related points.

“It’s amazing what a big change in market attitude can occur in just 24 hours,” said a Texas-based producer. He was referring to the price negativity that abounded on Thursday, only to be converted into a consensus that Friday’s late run-ups will carry over into higher averages today. About the weekend softness, he observed, “Forecasts are one thing, but whether they [buyers] really need the gas on a day-to-day basis or not is what drives spot prices.”

It was Thursday’s affirmation by the National Oceanic and Atmospheric Administration of an earlier Salomon Smith Barney forecast of an unusually cold winter approaching that drove futures higher, and cash then began following the screen upward, said a Gulf Coast trader, reflecting the view of several other sources. The NOAA concurrence with SSB “was a double positive for Nymex,” he added. Henry Hub ran about 20 cents back of November futures Friday, but a cash rebound today is almost certain to narrow that gap considerably, the trader said.

The concern about heavy winter heating demand was showing up as well in Nymex’s heating oil trading pit, where the November and December contracts were making strong gains of just over 2 cents per gallon each. Crude oil numbers also were up sharply.

“Prices ran up like crazy at the end,” said a Gulf Coast marketer, who saw his Tennessee 500 Leg deals go from an opening $2.18 to a final $2.42. Weather load was mild, he said, “but people are still trying to top off storage [after the cold winter predictions], and that was competing with current-burn demand.”

A Midcontinent marketer expressed surprise at the super-strength of the belated rallies, considering that fundamental support remained close to non-existent. He also was puzzled about “why cash started off with knowledge of the NOAA report, but still fell until it got a mid-morning wake-up call from the screen.” Nevertheless, he expects today’s prices to average around the high point of Friday’s ranges.

Florida citygates achieved the rare small gain, as Florida Gas Transmission continued a low-linepack OFO for its market area.

The PG&E citygate and Malin might have been expected to keep buckling under the weight of a high-inventory OFO issued by the PG&E utility (see Transportation Notes), but after plunging initially, they also joined in the overall rebound, a marketer said. The OFO imbalance tolerance of 9% was pretty lenient, he said, “but you still have to be careful about [a possible change] Sunday.” He noted that the OFO, along with volatile trading ranges, squeezed the differential between Malin and the gate to less than a dime — it usually is in the vicinity of 20 cents. “I’m betting we come back Monday with $2.50-70 prices at the citygate,” he added.

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