The rout was on Tuesday in the cash market. Buffeted by a fairlybenign weather outlook, both near-term and for the transitionperiod into February, and a plunging screen, prices fell betweenabout 50 cents and a dollar at almost every point. Malin’s declineof about 15 cents spotlighted it as relatively firmer than the restof a very weak market.

No one was expecting a rebound. With the February futurescontract falling more than 50 cents Tuesday and little change duein the temperature picture other than a new cold front approachingthe Midwest, it’s safe to assume prices will keep falling today,said a source who added, “It can’t get any more bearish than it isright now.”

Today’s storage report isn’t expected to pull any price-boostingrabbits out of a hat either. A trader at a large marketing firmsaid his company expects AGA to report a fairly small withdrawalvolume for mid-winter; “we’re thinking about 100 Bcf or less.”

However, an aggregator noted that Rockies numbers were onlyabout 20 cents back of Henry Hub, and said Rockies storage is wellbelow year-ago levels at Clay Basin. Apparently California bordertraders are getting the hang of dealing with the newly implemented70% daily balancing rules by SoCal Gas, he said, since the borderwas among Tuesday’s bigger losers after having gained a little morethan a dollar on Monday. SoCal will go to 90% balancing whenstorage volumes hit 30 Bcf, and they stand at about 37 Bcfcurrently, he said.

A marketer who reported deals only 3 cents higher at TranscoZone 6 (NYC) than in the non-NYC Zone 6 pool said there’s obviouslynot much premium for NYC deliveries any more, “and I’m sure buyersthere like that just fine.” Quoting Transco Zone 5 (MiddleAtlantic) from the high $7.30s to the mid $7.70s, he said there wasgreater volatility in Zone 5 because there are no indexes for thatmarket area. “Zone 5 prices are based mainly on Gulf Coast numbersplus transport and variables such as profit margin,” he said.

A little February business is starting to stir. Indexes willdefinitely be a few dollars lower, a Gulf Coast producer said,pointing to Tuesday’s screen close of just under $6.95, more than$3 under the January settlement of $9.98. Production-area indexpremiums for Transco were high but starting to come off, he said.”They’re still plus, but not as much as before.”

To one marketer, it seemed that utilities bought more baseloadthan they needed for January. For that reason he expects them toscale back substantially on February baseload deals.

©Copyright 2001 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.