A Transco Zone 6-NYC spike of more than 30 cents was accompanied by scattered and considerably smaller upticks at other points Monday, but for the most part flat to moderately softer prices reigned for the Christmas holiday. Most declines were in single digits, with only the Rockies dropping by more than a dime.

Virtually all deals were done for the Dec. 24-26 flow period (with Canadians trading through Dec. 27 because of Thursday’s Boxing Day holiday). Many players, especially among the utility community, will take off Christmas Eve. Some sources indicated they will be in for at least a while Tuesday, but they expect very few if any new deals to be struck. It will be a short workday dominated by catching up on paperwork and maybe making some preliminary plans for bidweek, one said.

A marketer said his staff will be in Tuesday, “and if any trading opportunities arise we’ll take part, but I don’t really expect anything to happen.” Peoples Gas Light & Coke may be one of the rare Midwest LDCs active in the market, he said, but added that he was not sure about Peoples’ status. The Midwest was a little cooler Monday but temperatures were seasonal close to 40 degrees and there was no snow in the forecast, the marketer said. He couldn’t think of any issues that would interrupt traders’ holidays, saying they would have arrangements in place to use storage services if unexpected demand arises or load drops precipitously.

Going by natural gas futures, Monday was mildly weaker with a loss of 6.7 cents. In recent weeks traders had seen some relationship between movement of the gas and crude oil/heating oil contracts, but there must have been a major disconnect Monday. Continuing worries about the supply situations of Venezuela and Iraq helped generate a crude spike of $1.60/bbl to $31.75 for February (the new prompt month in crude), while heating oil also registered a huge gain.

A couple of Northeast traders noted that Monday’s temperatures had not cooled off as much as was forecast late last week. “They projected today to be freezing around 28 degrees and it’s more like the mid 30s to mid 40s,” a utility buyer said. But another utility buyer noted that snow is predicted for Wednesday, adding, “There’s supposed to be a big storm headed our way.” But although a white Christmas is expected for much of the Northeast, Transco Zone 6-NYC was the only citygate to respond with a substantial price gain.

A producer said he would be thankful for a short workday Tuesday. “Even if I wanted to do bidweek stuff, I would be out by noon Central.” He was starting to do a little bit of January business, but “just index for now. Most of the trading will be done on Thursday, seeing as how no one will be in tomorrow [Tuesday].” Gulf Coast prices bounced around a bit Monday, tending to move lower in late deals, he said. There were some restrictions on TCO pool supplies, leaving them relatively weak compared to Columbia Gulf-mainline. “Mainline was so strong [at just over $5.00] that you couldn’t take mainline gas to the TCO pool [about 15 cents more] and beat your variable costs.” He also noted that the Transco Zone 6-NYC run-up left production-area Station 65 behind; Station 65 quotes fell nearly a nickel.

The market was flat as could be, a Midwest utility buyer commented. “We’ve gotten back to normal weather in Midwest, which made a good weekend. It looks like an ‘icky brown Christmas’ for us, with no snow forecast.” Another utility buyer in the region concurred, saying he made no holiday purchases because with more seasonal temperatures in effect, “the weather is too mild for us to need new gas.”

But a Midcontinent trader said predictions of a white Christmas helped strengthen a few pipes in an otherwise flat market. “There wasn’t a lot of movement since Friday, but a little pickup in demand with the cold weather coming on. Short-term forecasts say we could have six inches of snow by Christmas Day. We’re trying to finish up all our stuff today so we won’t be in tomorrow.”

A marketer quoting intra-Alberta numbers up about a dime to the C$6.40 area said the Calgary area was freezing at about 10 degrees F. Monday.

Several cash sources agreed there didn’t seem to be “any good reason” for Nymex to hold even an abbreviated trading session on Christmas Eve. A Midwest utility buyer said not even her company’s futures traders planned to participate.

Analyst Kyle Cooper of Salomon Smith Barney said his final estimation for this week’s EIA report (which will be delayed until Friday) is a 102-112 Bcf withdrawal. He added, “The weather will remain a key driver as we enter the coldest portion of the winter on a historic basis. Historically, average temperatures continue falling through about the third week in January. Thus, even ‘normal’ temperatures over the next few weeks are quite cold and should result in rather large storage withdrawals.”

A western marketer reported finishing January business last week, adding that “I think a lot of other people did also” because they didn’t want to hassle with counterparties being out on holiday and/or vacation. A Midcontinent marketer said he still has more January trades to make, but thinks that “what’s left to be done after Christmas probably won’t be very substantial.” He tried to get some January deals going Monday but failed due to what he called “a dead market.”

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