“The Three Stooges didn’t fall as fast or as hard,” one traderremarked, as the usual weekend demand crunch, a bearish 6- to10-day forecast and Thursday’s futures market plunge were cited asreasons for the nearly universal drops of over a nickel. New YorkCitygate prices were among the hardest hit Friday, as Monday’shighpoint of $2.75 has given way to the mid $2.40s at the week’sclose.

A North Carolina-based buyer was not surprised by the market’sdecline heading into the weekend. “I was forced into the market topick up some gas for peaking load earlier in the week, but havebeen inactive since. Weather has moderated nicely and the forecastis calling for more of the same,” he added.

California prices were also driven down a dime or so Friday.PG&E Citygate fell from the mid $2.40s to the mid $2.30s andthe SoCal border fell to the low $2.20s. “There is too much gas onthe system,” one western trader said about PG&E. “They havescheduled an OFO for Saturday because it is so overloaded, but thathappens every year at this time. Traders are also noticing thatit’s warming up in the Northwest, so hydropower will start kickingin soon.” He added that trading was unusually slow, as many westernmarketers had the day off to attend a Western Traders conference inSanta Fe, NM.

Chicago prices fell into the mid $2.30s with Chicago Citygatefinishing the week at a 2 cent discount to Consumers Power. Onesource was not surprised by the drop. “Chicago had beenartificially high all week. The weather was hot, but not hot enoughto sustain the kind of pricing we were seeing. There was one majorplayer out there buying all the Chicago gas he could muster. Whenhe stopped buying the prices fell.

Florida pipes ascended to the high $2.30s and low $2.40s earlierthis week, but thanks to Friday’s drop, they are now trading in thehigh $2.20s. One Florida-based trader thinks the decline will helpjump-start what has been a market devoid of buyers. “As the pricedropped, it started getting a little better. The utilities arecalling to try and bang out the lowest possible price using theiroil supply as leverage. Unfortunately, their demand goes down withthe weekend too. I suspect, the utilities will start coming aroundearly next week, now that Florida gas is in the high $2.20s.

For the bulls, all is not lost said Wayne Knupp, strategy leaderfor Koch Trading. “On Monday, NEPOOL was selling electricity for$850-$1000/MWh, which means every facility was running at maximumstrength,” “That’s a lot of gas being burned. It makes me thinknext week’s AGA storage report will be a whole lot more bullishthan this past week’s report of a 91 Bcf injection.”

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