As many had expected, prospects of severe heat averted much ofthe softness that normally accompanies a Fourth of July weekend,considered the year’s lowest demand period. But that was true onlyin eastern markets Friday. The bottom was dropping out for pricesin the West, particularly at the Southern California border.

Cooler weather in California combined with high-inventoryOFOs-both real and potential-to bring down prices throughout theWest. Only flatness in intra-Alberta, where storage injectionstended to soak up much of the available supply, survived the plungefollowing a Canada Day holiday hiatus. The Permian Basin and Waharesisted the softness more than other points because of airconditioning load in Texas and the Midcontinent/Midwest.

Southern California Gas continued an Overnominations Day(OD)declaration, initiated Thursday, through at least Saturday, andthat knocked the stuffing out of border quotes. The border, with a$2.44 average Thursday that was over a nickel above index, was downto the $2.30s immediately Friday and quickly kept eroding untillast-minute deals were being reported as low as $2.00.

Some people thought that Thursday’s OD might have taken enoughgas off the SoCal system so it wouldn’t last, said anOklahoma-based trader, “but that didn’t happen.” The OD notice wasproperly posted on the utility’s GasSelect bulletin board by 9:30a.m. PDT Thursday, he said, but then acknowledged that few peoplewere likely to be looking for an OFO-like issuance then becausethey are quite rare on weekdays. (Another source said his companywas unable to gain access to the bulletin board until some timewell after 9:30.)

Pacific Gas & Electric continued to expect a high-inventorysitutation would remain for its system through Monday but hadrefrained from issuing an OFO as of Friday afternoon. Widespreadtrader expectations of an OFO caused PG&E citygates to drop alittle over 20 cents.

The considerable weakness of the California market spilled overinto the Rockies and Southwest, where several points recordeddeclines in the double digits, led by a San Juan Basin fall ofnearly 20 cents.

Meanwhile, it was obvious that Northeast buyers were taking hotweather forecasts to heart and stocking up on gas for the holidayweekend just in case, a marketer said. She thought Transco Zone6-NYC deliveries were up about a nickel “because there weren’t alot of sellers involved today [Friday]” due to holiday concerns.Another source saw the region’s utilities as active buyers”preparing for the worst.” Sunday looks to be the peak day of theholiday period, he said. “They [utilities] will likely be burningeverything Sunday and turning back the excess on Saturday, Mondayand Tuesday,” he predicted.

The Northeast demand stabilized Gulf Coast prices at flat to afew cents lower. Trading activity certainly got sparse in a hurry,though, said a marketer as he and others had fewer deals to reportthan usual. Sonat numbers got pushed down by the potential of aweekend OFO, but none ever materialized, he said.

A tropical disturbance was detected Friday in Mexico’s Bay ofCampeche while a tropical wave was reported in the northernCaribbean Sea.

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