Big declines in Northeast and San Juan/Rockies numbers stood out Friday amid a general market that was flat to slightly lower. Fairly benign weather helped explain the softness in parts of the West, while the Northeast was consolidating from recently sky-high price levels.

The Northeast was expected to see a day of relief from the deep freeze Saturday before a new arctic air mass swept into the region from Canada Sunday. Algonquin citygates registered Friday’s sharpest plunge of more than a dollar in hugely volatile trading that spanned four dollars, but maintained their ranking as most expensive point in the mid $7.40s. A Northeast utility buyer said that although the region’s recent Nor’easter had moved out to sea, a continuing restriction on flows through Algonquin’s Southeast Compressor Station on the New York/Connecticut border limited citygate deliveries. Noting that winter still hasn’t officially begun, she added, “Many people around here feel like they’ve already been through a full one [winter].”

The fresh cold wave was also due in the Midwest, where weekend pricing was flat to just 2-3 cents down.

Going by the National Weather Service’s outlook for the middle through the end of this week, it seems reasonable to expect a retreat from last week’s strong weather-driven prices. In its six- to 10-day forecast issued Thursday, NWS expects normal temperatures to prevail across the southernmost tier of states and above normal readings for all regions northward.

Of course it’s mid-December, so that means it’s likely to be merely cold, rather than super-cold like last week. A Gulf Coast marketer said to be careful about relative perceptions, adding that it will be “warmer” but not “warm.” The -er suffix was key to him.

A Midcontinent trader was thinking along the same lines, saying, “I think we’ll get some relief from the cold [this] week, but don’t see it bringing down prices much” because a lot of people are expecting a big storage withdrawal volume in EIA’s Thursday morning report. He also looks for the screen to rise a bit more for much the same reason.

Analyst Kyle Cooper of Salomon Smith Barney said his initial estimation for this week’s storage report is a draw “that could easily exceed” 150 Bcf. “This should continue the recent string of well below year-ago level inventory changes,” he added.

And Lehman Brothers analyst Thomas Driscoll estimated that markets have tightened slightly “despite the recent gas price strength. Over the past four weeks, storage withdrawals — after adjusting for the weather — have been an average of 1.4 [Bcf/d] higher than five-year average withdrawal rates.” In addition to raising his average price forecast for 2003 from $3.50 to $3.75/MMBtu, Driscoll estimated that this week’s storage report will show a withdrawal of roughly 125 Bcf versus 16 Bcf a year ago and the five-year average of 55 bcf. If his prediction is realized, the year-on-year storage deficit would increase from 298 Bcf as of Nov. 29 to 407 Bcf (estimated withdrawal of 125 Bcf versus a withdrawal of 16 Bcf a year ago).

A couple of traders agreed that Friday’s market seemed especially quiet in comparison to all the winter storm excitement earlier. “I’m pretty sure most people welcomed the quiet” end of a hectic week, one said.

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