What was gained on Wednesday was quickly lost yesterday as mostcash prices tumbled about 40 to 50 cents on average following theafternoon post-storage-report dip in Nymex futures the day prior.Southern California prices lost several dollars but most borderspot quotes still came in above $30.

The SoCal summer strip actually was up to about $30 butrest-of-the-month prices stayed flat around $26-$27, said onetrader.

Northern California was about the only place where daily changeswere in the positive column. OFO fears related to short supply andplummeting storage levels pushed citygate and northern Californiaborder prices up a dollar or two. PG&E Citygate averaged around$14, while Malin added a buck fifty or so and jumped past $12.

PG&E’s Pipe Ranger bulletin shows system inventorythreatening to dip below 4,000 MMcf, which would be outsideoperating limits and would probably prompt the utility to call anoperational flow order to maintain system integrity. Californiatemperatures remained relatively cold with lows dipping into theupper 30s throughout many parts of the state.

Locations in the Pacific Northwest and western Canada lost moreground than points in most other regions. Sumas was down 70-80cents. “Prices were down across the Western Basin,” said one Sumastrader. “AECO was around $7.70 with a range of $7.65 to $7.80.”

San Juan prices, which had shown greater than average strengthearlier in the week, lost less ground than most points yesterday.Non-Bondad quotes averaged in the low $5.40s and forward basiscontinued to tighten. “It’s been doing that for the last fewweeks,” said one Rockies producer. “It’s gone from a minus 20 to aminus 15 or minus 12. A lot of times because the power market peaksat $700 MWh in the summer, gas becomes a premium. People are justbuying the forward market in gas out in the west because theyexpect a real hard summer ahead.”

Adequate supply because of mild weather in Texas continued todepress prices, as some points lost up to 50 cents. “However,change is in the air with high temperatures only expected to reachinto the mid-60s Friday, Saturday and Sunday and lows down in thelow 40s,” noted one Texas producer. “That will represent a prettybig change from [Thursday] when the temperature was already 70degrees when I woke up. We are moving from AC load to heating loadin 24 hours.”

The expected cooler weather already was having some impact.Tejas pipeline was experiencing low linepack yesterday, whichforced one Texas aggregator into the spot market for gas at Katy.

In the Midwest, the market was fairly quiet. Chicago pricesstayed in the low to mid $5.60s for most of the session, down morethan 50 cents from the day prior, but one trader heard reports ofNipsco prices shooting above $5.70 after 10:15 a.m. (CST) when thefutures market made its run. “Although it is more illiquid, Nipscois still trading a 2-3 cent premium to NiGas,” he said.

The short-term weather picture remained relatively mixed withabove normal temperatures forecast for Texas, the Southwest andmost of California, Nevada and the southern Rockies, and belownormal temperatures forecast for an area covering most of thenorthern third of the nation except for the Northeast. However, theNational Weather Service released its long-term forecasts callingfor only a small area of below normal temperatures concentrated inthe upper Midwest and slightly above normal temperatures acrossmost of the southern half of the nation.

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