The cash market split somewhat along geographical lines againMonday as overall softening grew greater going from West to East.Most Western points were flat to no more than 2-3 cents down, whileEastern declines mostly ranged from around a nickel to a dime.

Although a big winter storm dumped piles of snow from thenation’s midsection through the Northeast over the weekend, byMonday’s trading it already was getting ready to move beyond NewEngland into the Atlantic. A trader said it was still very cold inthe New York City area Monday-which may have helped explain whyTransco Zone 6-NYC’s drop of about 5 cents was among the mildestdecline in the East-but that temperatures should start movinghigher today.

A trader at the Southern California border thought the Southwestsupply basins stayed strong because of balancing reasons, helpingkeep the border flat. That’s the main reason western prices weren’tdropping as much as in the East, he said. However, another sourcesaid PG&E’s Diablo Canyon nuclear plant was coming back on-lineand should be at full power by the end of this week, likelyknocking out even more gas load in a region awash with plentifulhydropower.

“It was another quiet market with nothing really to push it inany direction,” said an Oklahoma marketer. And a marketer inCalgary said, “Everyone’s looking at the screen and wondering whathappens next.” The Henry Hub futures contract for April contributedto cash weakness with a fall of about a nickel.

Sources remained mostly bearish in their price outlook. With thestorage overhang and upcoming warmer weather, no reason exists tobuy gas, a marketer said. He doesn’t expect the market slide tostop for the foreseeable future, saying only a major supplydisruption such as a pipeline explosion could reverse thedowntrend. Another trader said the falling prices are “longoverdue, but I’m hesitant to say it will fall much further.”

Commenting on the merger announcement Monday morning by El PasoEnergy and Sonat Inc. (see story in this issue), a utility gasbuyer quipped, “It looks like El Paso is trading one Southern foranother.” Last month there were reports that El Paso was in mergertalks with electric utility firm Southern Co.; and Sonat is theparent company of Southern Natural Gas interstate pipeline.

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