With disappearing heating load and the previous day’s screen plunge exacerbated by the extra reduction of industrial demand associated with a long holiday weekend, cash prices tanked by more than a dollar — more than $2 in quite a few cases — across the board Friday.

In predictably subdued activity resulting from some traders taking the day off and the rest pushing to finish quickly in order to get a jump on the Christmas weekend, price declines ranged from a little below $1.10 to nearly $2.45. Many points were retreating to sub-$10 levels for the first time since the end of a mild November.

Daily numbers, which had been at large — nearly always triple-digit — premiums to first-of-month indexes during all of December, ended last week below index in many cases, primarily in the Northeast, Midcontinent, Rockies and Louisiana.

The limited nature of Friday’s dealmaking was underscored by several utilities and other market participants having traded for five-day flows on Thursday in preparation for being closed on the following day.

The weekend wasn’t expected to be totally devoid of weather-related demand, as snow was in the forecast for sections of the Pacific Northwest and the Northeast, and limited cold fronts were expected in the Midwest and South. However, that didn’t negate temperatures running as much as 25 degrees above normal in much of the U.S., The Weather Channel said. In fact, it added, date-specific record highs were likely, especially in the Southwest.

On the border between the Northeast and the Southeast, the nation’s capital was experiencing “spring-like” weather with temps working up to above 50 degrees over the weekend, according to one observer.

Many of the largest plunges occurred in western markets, which had to cope with high-linepack OFOs by California’s two biggest distributors (see Transportation Notes) in addition to the loss of price-supportive cold weather. In addition, Kern River was reporting high linepack systemwide Friday, and Westcoast continued to encourage drafting of its system due to excessive receipts.

One source found making a call on Tuesday’s price direction difficult because of the prospect that colder conditions could be returning in some market areas such as the Northeast around midweek, but he leaned toward expecting further softness, citing Friday’s second straight major screen decline (down 64 cents to $12.283) and the fact that the West and much of the U.S. midsection are forecast to have normal to above normal temperatures this week.

A Texas-based trader who markets gas on behalf of several independent producers said she came into her office for a little while Friday morning, but not for trading purposes. She was among those who had done all of their deals through the weekend the day before. As far as she could tell, all of the big trading operations had staff on hand Friday, but they planned to finish up quickly and leave around lunchtime, she said.

“There’s not much in the way of weekend demand with the milder weather,” the trader continued, saying it was “gorgeous” in the Dallas-Fort Worth area Friday. “I picked a good day to go Christmas shopping.”

A utility buyer in the Lower Midwest illustrated how scant heating load was getting by observing that usually his area is around freezing just before Christmas, “but it’s nearly 20 degrees above that today [Friday].” It was “about time we got back to paying less than $10” for gas into the pipe, he added.

A Weather 2000 advisory said the nation’s “Christmas holiday thaw” will abruptly revert back to a cold pattern in the East after the middle of this week. It’s a good idea to examine why December’s cold is even more “surprising” and “substantial” than what heating degree days (HDD), mean temperature departures or historical percentile rankings would indicate, the New York City-based consulting firm said. Not all HDDs are created equal, it went on, saying they “are a wonderful cumulative measure of mean temperatures and corresponding energy demand, but comparing weekly, monthly and seasonal HDD tallies from year to year may be more ‘apples vs. oranges’ than you would think. [Forty] HDDs tallied on a windy day is a lot ‘colder’ than 40 HDDs on a calm day. As purely the mathematical average of the day’s high and low temperature, it does not factor in the apparent temperature on people’s skin, and the physical penetration of that cold (assisted by the wind) into residential and commercial structures.

“Unlike the naturally radiative environment of rural communities, urban metroplexes (i.e., cities) are actually made colder at night when conditions are windy, as any accumulated warmth by anthropogenic structures and surfaces is briskly evacuated (picture blowing on a bowl of hot soup). Also, in rural/suburban settings when the winds are calm, temperatures can plummet literally in the minutes nearing sunrise and shortly after sunrise (escaping long wave radiation is still greater than incoming short wave radiation). The HDD calculation couldn’t care less how, when or for how long the low temperature was achieved, just how cold it got, period. A much more accurate measure of “how cold” a day truly is (but more complicated to calculate, no less predict), is the time-averaged temperature of the day (sum of all hourly temperatures, divided by 24). During windy conditions, the difference between a ‘regular HDD daily total’ and a ‘time-averaged HDD daily total’ can be significant, as the corresponding mixing of the surface layer increases the number of hours in a day kept very cold (below 32 [degrees] F, for example).”

©Copyright 2005Intelligence Press Inc. All rights reserved. The preceding news reportmay not be republished or redistributed, in whole or in part, in anyform, without prior written consent of Intelligence Press, Inc.