Swing prices for the first three days of 2005 fell across the board Thursday as weather forecasts remained generally bearish. The previous day’s futures gain of 6.1 cents may have helped mitigate the softening, in which declines ranged from a little under a nickel to about 40 cents. Losses were distributed fairly evenly through geographic regions.

Freezing conditions, accompanied by snow in some cases, were due on New Year’s Eve in mountainous parts of the West along with the Upper Plains/Upper Midwest states and northern New England. Otherwise, highs from the 50s into the 70s would prevail in much of the U.S., according to The Weather Channel.

The Energy Information Administration reported a 178 Bcf withdrawal from storage for the week ended Dec. 24. The volume handily exceeded the year-earlier and five-year average pulls, but was treated bearishly at Nymex because such a large draw had been widely anticipated and was already factored into market psychology. Besides, as one source noted, the next report is likely to feature a much smaller withdrawal due to the major moderation in eastern weather since the Christmas weekend.

Although it did not issue an OFO, PG&E projected that system linepack would be rising above its maximum target levels Saturday and Sunday. And Kern River reported high linepack in its three furthest downstream segments.

Thursday was “one of the quietest days we’ve seen in a long time,” said a Northeast marketer who cited the early close of futures activity, a lot of traders being on holiday and unseasonably warm weather that dampened demand in his region. He noted that a huge reduction in January basis last week as warmer weather settled in had caught many traders by surprise.

A Midcontinent/Midwest trader concurred on how quiet the market had been, commenting, “It’s really thin out there.” He expressed a little surprise at how weak futures were, saying colder weather would be arriving in parts of the Midwest before the weekend ended. He anticipated moderately firmer cash quotes this week, saying, “I don’t think people are ready to give up on this market yet.” But, he acknowledged, unless some serious cold weather for an extended period comes before the end of January, prices will go down pretty hard. “We’ve seen a little cold so far this winter, but not much follow-through that would keep prices up,” he said.

Deals for January baseload pretty much got wrapped up Wednesday, the trader continued. Anything done Thursday would have been “very minimal,” he said. He reported seeing little price movement up or down as bidweek proceeded, saying most Chicago citygates were in a tight $6.20-25 range. He reflected the perceptions of several other sources in calling it a “pretty boring bidweek. Very little volume got traded, and almost nothing was going on.”

Nearly all deals done Thursday were for Saturday-Monday flows, but at least one marketing firm reported trading through Jan. 4 because staffers would be on holiday Monday. Unlike most companies observing the New Year’s holiday on Friday because Nymex was to be closed that day, the marketer was scheduled to work a half-day then.

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