The cash market managed to keep up a mildly firmer facade Thursday, but prospects for a weekend crash are fairly strong, sources said. Yesterday’s quotes ranged from flat to either side of a nickel higher in most cases, with scattered points Transco Zone 6 (both pools), Transco Station 85 and MRT registering small declines.

Cash had a firm base on which to begin the morning from the previous day’s futures climb of about a dime, a marketer pointed out. It also continued to get some weather support as colder air followed one winter storm moving out to sea from the Northeast, an arctic front descended from Canada into the Upper Plains and Midwest (which was expected to generate more lake-effects snows), and new snowstorms were due from the Pacific Northwest into the northern Rockies by Saturday. However, the cold air masses were expected to stop short of penetrating the Deep South.

But there’s a completely different outlook for today, according to a Midcontinent/western trader. Activity will begin with the knowledge that February futures fell 14 cents the day before, and deals will be made for flows through Tuesday because of the three-day Martin Luther King Day weekend. Not only does demand typically drop even further than usual for a holiday weekend, he observed, but forecasts call for generally warmer temperatures in most areas as next week begins.

Cash numbers began a few cents higher Thursday and remained pretty steady in a tight range until Nymex opened for business, the trader said. “Then cash followed it [screen] down the rest of the way. Most cash deals had been finished by the time futures started trading, though, and that’s why averages were up a little for the day.” The trader said he and his colleagues were surprised that the screen plunged as much as it did. “We were expecting a lot more resistance at $2.30-32, but it tore right through that.”

Major weakness in natural gas futures was matched by heavily negative trading in the crude oil and heating oil pits.

The market setup was starting to look really weak Thursday, commented a Gulf Coast marketer. “It’s ugly, ugly, ugly. There’s room to go much lower starting Friday. There’s no reason at all to go up.”

Tennessee said it may need to implement some service constraints in the Northeast after being notified Thursday by Maritimes & Northeast of “a loss of receipt volumes, including those scheduled for redelivery to [Tennessee] at Dracut [MA].” A source said Union Gas Ltd. had made the cuts into M&NE because of “some kind of problem created on the producer end.” However, inquiries trying to confirm that report were unsuccessful.

Western markets have been trading primarily sideways for the past week, “and we may be trading back and forth for some time to come,” a marketer said. “It moves up 10 cents, then moves down 10 cents. There’s no trend, nothing to break the cycle. We need some event like a few weeks of storage going really high or really low, or some extended weather. Right now we have a little weather, but we also have a lot of storage and hydro is looking good.”

A trader in the Midcontinent confessed, “I don’t really understand this holiday weekend market. We and just about every trading counterparty we know will be in the office Monday,” even though Nymex will be shut down and Tuesday’s gas will have already been arranged Friday. It probably will be a short day for most people, consisting mainly catching up on paperwork, he said.

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