Bears roamed the gas trading woods in full force Thursday,sending cash prices down by a dime or much more at nearly allpoints. The biggest declines of about 35-45 cents occurred at thepreviously high-flying Transco Zone 6 and Texas Eastern M-3citygates in the Northeast. Although some Zone 6-New York Citydeals were still being quoted above $3, the average there fell intothe mid $2.80s.

A fall of almost a dime on the Nymex futures screen, along withwarmer weather in some regions, were responsible for the overallsoftness, sources said. Even Alberta, which had been bracing forparticularly severe weekend weather earlier this week, apparentlywon’t get as cold as predicted, according to Calgary traders.

The Midwest joined in the overall downturn even through it wasstill below freezing and snowy in much of the region. An OFO byNGPL (see Daily GPI, Jan. 7) remained in effect Thursday but failedto prop up Chicago citygates. In fact, a couple of sources weremystified by why the OFO had generated a substantial Chicago run-upon Wednesday. One reported a volatile citygate range of $2.04-42,saying the trend was down all the way.

A Gulf Coast producer was glad he sold early, mostly in the high$1.80s and low $1.90s, as prices were coming off later, he said. Hewas not optimistic about any resurgence, saying he wouldn’t besurprised to see the Gulf market fall to the $1.80 area today.

A marketer noted how far Columbia-Appalachia pool prices havefallen. After frequently rivaling Zone 6 and M-3 deliveries latelast year, TCO was nearly a dollar under the citygate levelsThursday. TCO pool had been strong in late 1998 because storage wasfull and that caused a lot of gas to get locked out of the systemat interconnects, the marketer said. Now that storage is beginningto empty, the pool no longer has that price prop, she said. Shefound it curious that storage fullness on Transco had the oppositeeffect in the fall and early winter; Zone 6 prices were relativelyweak then because of no weather demand “and nowhere to take thegas.”

©Copyright 1998 Intelligence Press Inc. All rights reserved. Thepreceding news report may not be republished or redistributed, inwhole or in part, in any form, without prior written consent ofIntelligence Press, Inc.