A small decline at the MichCon and Consumers Power, and a largerone at the Southern California border were the only exceptions tothe raging bull market that continued to prevail in cash tradingThursday. Otherwise, average price increases ranged from about 50cents in parts of Louisiana to more than $4 at the Chicagocitygate.

Yet another record-setting performance by the screen continued tosupport cash, but the primary impetus for the latest surge in swinggas prices remained bitterly cold weather in most regions. Wind chillfactors of 20-60 degrees below zero in the Midwest will persist intothe Christmas weekend, a forecasting service said. In addition, OFOsor other restrictions by pipes into the Northeast (see Transportation Notes) contributed todollar-plus gains at Northeast citygates.

Chicago business was more complicated than usual with utilityOFOs and varied trading periods. Nicor, which has a Critical Day ineffect today through Tuesday, will be closed today, so it wasrequiring that nominations be made for five days Thursday. ACritical Day situation limits customers behind the system tostorage withdrawals and “company supplies based on contractedquantities,” according to the Nicor hotline. A producer said thatmeans “I’d better be delivering everything I’m obligated for intomy customer’s storage account because storage management contractsusually put the onus of OFO penalties on the supplier.” Nicor’sCritical Day penalty is $60/Dth plus the cost of gas.

Although it could not be confirmed directly, NIPSCO andPeoples/North Shore reportedly will be taking new weekendnominations today, so citygates for those LDCs mostly were tradedfor one day only, a marketer said. Peoples and affiliate NorthShore declared a Critical Shortage Day for today only; no increasesor decreases in customer volumes will be allowed.

“I’ve never seen such a price disparity among the variousChicago gates,” one trader commented. Nicor is trading more thanthree dollars above Peoples, he said, “and NIPSCO is even strongerthan Nicor.” Meanwhile, you can “hardly even give away” deliveriesby Alliance, he and another source exaggerated. The second tradersuggested that could be attributable to to Alliance gas beingbacked up at the interconnect downstream of Troy Grove storage onNicor’s system. Nicor has threatened to allocate the 300 MMcf/dfrom Alliance down to 125 MMcf/d in order to maintain properpressure on the Nicor system, he said.

A Midwestern marketer said MichCon prices remain unusually weakbecause the LDC typically does a fairly large amount of “parking”deals during the summer, allowing traders to stash gas on thesystem for a fee. However, those players are required to take theirparking gas back in the November-December period because MichCondoesn’t want to give up any deliverability options in the latterpart of winter, he said. That’s causing a price-depressing glut ofsupply on MichCon currently, the marketer went on, but thatsituation should disappear next month. Normal storage holders stillhave flexibility in making withdrawals, he said.

Nearly all points were reported starting near their daily highsand falling off later. Kingsgate was an exception with a risingprice trend, mainly because it’s a very illiquid point and traderssometimes have to scrounge for whatever they can get, a Calgarysource said.

Bidweek remained a non-starter for most sources; however, oneRockies trader said Thursday he is on vacation through the end ofthe year “because I’ve already gotten everything wrapped up.”

A marketer quoted SoCal border basis for January at plus 565-588and fixed prices at $16.70-17.25 Thursday. That has again created amarket situation where next-month gas is trading at a sizeablediscount to current swing, he said. “The question now becomeswhether January will move higher to meet December or whetherDecember will fall to converge with January. Either way, somethinghas to happen to remedy the current backwardated condition.”

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