Sources agreed that storage buying and the screen’s 40-cent-plus last-gasp rebound on Wednesday were behind rising cash numbers at most points Thursday. In two-day deals for flow through the end of December (Saturday), a few flat points were scattered among gains ranging from less than a nickel to nearly half a dollar.

The month-ending show of strength isn’t expected to survive into the start of the January aftermarket. As a producer put it, prices will “get hammered Friday” because of the long holiday weekend and no weather support. He might have added that the weak start of February futures in their prompt-month debut will add further downward pressure to cash quotes Friday for the Jan. 1-3 period.

Cash-screen convergence was poor. Even with Henry Hub prices up about 15 cents into the mid $10.00s Thursday, that left the Hub more than $1.30 short of the January futures settlement of $11.431.

The Energy Information Administration surprised no one in reporting a storage pull of 162 Bcf — a duplicate of the previous report’s volume — for the week ending Dec. 23. The size of the withdrawal jibed well with prior expectations, but futures traders were in a bearish mood again after Wednesday’s rebound in an expiring January contract and sent the newly minted prompt-month February contract to a loss of 41.4 cents. Nymex’s petroleum-based offerings all rose. Although a report Thursday morning showed a rise in crude oil inventories, declines in unleaded gasoline and distillates (which includes heating oil) stocks along with continued concern over a potential OPEC production cut next month buoyed the oil products.

Several pipelines are cautioning customers to be wary of potential OFOs over the long weekend because of lack of demand threatening to overwhelm limited storage injection capabilities. Southern was typical in saying it did not expect to issue a Type 6 OFO for Friday or Saturday, but the situation was “too close to call” for an OFO against long imbalances Sunday and Monday.

A Northeast-based producer attributed most of Thursday’s cash firmness to the prior day’s screen run-up, noting that January had finished strongly and so had the outer months. There’s very little current-burn demand, he said, so he assumed that some people were buying gas to inject for storage plays; that is, buy physical gas for storage now and sell February or March futures.

The producer looks for prices to be “really weak Friday unless something big happens in Access.” Northeast weather is rainy and relatively warm right now when it should be cold and snowy, he said. “Putting my gas [trading] hat on, I’d rather that it be cold [to support prices]; but wearing my personal hat, I love it.”

Not much was left to do in January trading Thursday, he continued, characterizing it as “bits and pieces, and that’s about all.” His company had already finished bidweek business and did no new deals Thursday, but judging from the bids and offers appearing on an online trading service, he said it looked like January prices were down a little Thursday morning from Wednesday levels.

Looking back over fast-fading 2005, a Midcontinent producer said he couldn’t find the words to describe it. There was a “disconnect of immense proportions” between market fundamentals and record-setting futures prices, he said. “Nymex folks are going one way, and we cash traders who can’t find any demand for gas are going another way.”

He agreed with the Northeast-based producer that a lot of Thursday’s buying was for storage purposes, saying one would be foolish to reject a margin of approximately 75 cents from buying spot gas for storage now and selling February or March futures. Of course, it’s a case of who has storage account space open to accept injections now, and not everybody can do it, he added. He expects the April screen to be strong because storage buying should be heavy around then as injection season begins.

Hurricane-related Gulf of Mexico shut-ins dropped by a meager 7.99 MMcf/d from a week earlier. Minerals Management Service said 48 companies reported 1,954.02 MMcf/d of supply as still offline Thursday, compared to its count of 1,962.01 MMcf/d on the previous Thursday (see related story).

The Weather 2000 consulting firm calls the mild weather pervading the U.S. in the last week of December a probable “calm before [the] storm” in January. Because the current mild week makes many forget that three-fourths of December 2005 was the coldest such period in decades, Weather 2000 suggested a list (edited) of things “to remind yourself of, and prepare yourself for,” with the 2006 portion of the winter right around the corner:

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