The East-West divergence in price tendencies was repeated againTuesday in a slightly different way. While Monday’s overall uptickshad been most pronounced in the West, eastern markets retreated byabout a nickel Tuesday as Western markets managed mostly flat tobarely-off-a-penny performances.

Western sources continued to cite colder-than-normal weather asreasons for the relative price strength in their region. PG&Ecitygates even managed a small increase largely due to alow-inventory OFO by the utility in effect today (seeTransportation Notes). “It looks like we’re trading in El Paso’sOFO [the pipeline suspended an Unauthorized Overpull Penalty alert]for PG&E’s OFO,” a trader remarked. Sources noted continuedfairly heavy gas purchases by many of the western utilities.

“We’ve still got some weather in the West, and it’ll stay coolhere a few more days,” a marketer said.

A Midcontinent source noted it was becoming evident that lessRockies gas was coming into her region as more stayed home to copewith the western chill. That was causing Midcontinent/Rockies basisto tighten, she said. Rockies quotes in the mid to high $1.70scompared with low to mid $1.80s pricing on the Midcontinent pipes.Late last week the two markets were about a dime apart.

Lacking significant weather demand and influenced by modestscreen softening, eastern prices fell off but were rebounding up to3-4 cents in late trading at some points, several traders said. AGulf Coast producer suspected that people were shuffling gas amongthe various pipes in search of the highest prices, and that createdsome space vacancies that hadn’t existed in the early going. Amarketer helped confirm that perception; it got harder to find AguaDulce gas into Channel because it seemed that supplies were goinginto pipes other than Channel, he said. “A producer that sold me 40MMcf/d Monday into Channel said he could spare only 5 MMcf/d theretoday [Tuesday]. He was taking the rest elsewhere for a betterprice.”

There was still volatility in cash trading but it generallystayed within a specific range, one source said. He saw Chicagocitygates start a little more than a nickel down at $1.93-94,rebound to a flat $2, then fall back to around $1.97 in latetrades.

A marketer reported a lot of people, such as end-users, arefinishing up their storage requirements. However, April is still awithdrawal month on the Northern Natural Gas system, he said, so”we’re seeing a lot of guys trying to clean that stuff up [completewithdrawals from NNG storage].”

Several traders have observed gas load being supported in recentweeks by nuclear plants going down for refueling in preparation forsummer power demand. In a twist on that situation, Chicago-areaCommonwealth Edison said Tuesday 1,078-megawatt Unit 2 at LaSallenuclear station near Marseilles, IL could return to service soonand be at full power by late April or early May. The twist is thatthe unit has been down since September 1996.

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