After starting last week’s holiday-shortened trading period with gains at all points, the cash market finished with across the board losses Friday. The bearish factors were easy to tick off: a period of weather moderation that began Friday would continue through the weekend; February futures dropped 17.6 cents the day before; and the usual decline of industrial load over a weekend was a factor.

As on Thursday, the biggest losses occurred at high-priced Northeast citygates, although the Florida citygate and a couple of Louisiana production-area points also saw triple-digit drops. For the first time in the week the Northeast failed to see any quotes above $10.

The Rockies recorded all of the smallest losses that overall ranged from about a nickel to $5.50 or so.

The Energy Information Administration’s report of an 87 Bcf storage withdrawal during the week ending Dec. 28 was far short of consensus prior estimates in the mid to high 100s Bcf. It not only failed to meet expectations but also was less than the five-year average of 89 Bcf for the same period. Nymex reaction was predictably bearish at first as February futures dropped following the report, but the contract managed a subsequent rally to end the day 16.7 cents higher Friday.

Citigroup analyst Tim Evans commented, “It’s hard to say at first glance ‘what happened,’ but this was a holiday week, which does undercut industrial and commercial demand to some degree.”

A major warming trend could be expected during the weekend throughout the South, with highs 10 to 25 degrees above average reaching the 60s and 70s by Monday along with a few 80s in South Texas and southwest Florida, according to The Weather Channel (TWC). Similar moderation trends were forecast for the Midwest and Northwest, although those regions would remain on the chilly side for a while longer.

Storminess would be the weather watchword in the West through early this week, with the strongest storm moving inland Friday and another potent one due around Tuesday, TWC said. However, snowfall would generally be limited to the mountainous sections.

As expected, several OFO-like pipeline constraints that had been implemented to help cope with last week’s cold snap were being lifted either Friday or during the weekend (see Transportation Notes). In an ironic twist, though, after having a System Protection Warning in effect Tuesday and Wednesday due to the cold snap, MRT issued a new one Saturday because of warmer forecasts.

One sign of the reversal in weather trends was El Paso warning Friday of the potential for a Strained Operating Condition declaration due to high linepack. In another, Northern Natural Gas said that while its normal system weighted temperature at this time of year is 15 degrees, it projected averages of 27 Friday, 34 Saturday, 35 Sunday and 34 again Monday.

A Lower Midwest utility buyer said his company’s biggest throughput day of the current winter was Jan. 1. It was just starting to see some significant reduction in load Friday and expected more during the weekend, he said. He figured that weekend system volumes would be about half of what they were on New Year’s Day.

He looks for softer prices during the coming week before a return to normal January weather opens an opportunity for a rally around Friday. He noted that Northern Natural had imposed a couple of System Overrun Limitations on shippers last week but was back to regular operations Friday.

A marketer in the Upper Midwest noted that MichCon had lowered its GCR (Gas Cost Recovery) rate to $7 for the winter effective Jan. 1. She didn’t know if the new rate would extend beyond winter but said it would be difficult for spot gas traders to beat it when transportation costs are figured in. It was unclear whether the rate would cost her company any customers; Michigan requires that they give 12 months notice before returning to utility supply service, she said.

The warm-up was already under way Friday, the marketer said, and her area should be getting up to around 50 degrees by Tuesday.

Rockies producers are getting closer to having their patience rewarded. Rockies Express Pipeline (REX) said it expects to have interim service all the way to the ANR delivery point in Brown Count, KS, on or around next Saturday, “depending upon weather conditions and continued progress during the commissioning process” (see related story). REX continues to expect that full service to Panhandle Eastern in Audrain County, MO, will be available in early February.

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