Just as a couple of producers had predicted, the screen’s upturnMonday afternoon after being mildly negative earlier was enough togenerate a moderate cash rally Tuesday. Only the SouthernCalifornia border and Malin continued to head lower. Just as mostof Monday’s declines had been between 10 and 20 cents, the sameapproximate range applied to most of Tuesday’s rises.

But if futures can lead cash higher, they can also lead cashlower, which is exactly what a couple of sources expected to happentoday. The April futures contract lost even more ground Tuesdaythan it had gained the day before.

“Today [Tuesday] cash traded about as strong as it has all monthrelative to April Nymex,” said a Houston-based marketer. Henry Hubtended to stay at least 3 cents over the screen but also trendeddownward with it, he said. However, cash activity had already beenfinished by the time futures headed seriously south, he noted.”Actually there’s good demand in cash. It’s [supply] all goingsomewhere, although that may be hard to believe when you look atthe weather map.”

A Northeast trader agreed, saying he thinks short-term storageinjection demand is picking up. “There’s always room for storagebuying when you’re running 300-400 Bcf behind” the previous year’svolume, he said.

The California border averaged slightly under $11 Tuesday, whichis a tremendous comedown from prices that peaked at $36 andaveraged nearly $30 little more than a week earlier. Traders arestarting to see some chance of SoCal Gas lifting its 90% dailybalancing requirement before the end of the month, according to onewestern marketer.

“If it [the market] gets any quieter, I’m going to start takingthe day off,” said an aggregator whose perception of relativelysomnolent trading activity was backed up by a couple of othersources. The aggregator thought the quietness might be related toHouston Energy Expo coming up next week. Some people are alreadystarting to clear their market positions in preparation, he said.

Several sources reported looking for a withdrawal range in thisafternoon’s AGA storage report from the mid 60s [Bcf] to the low80s, with the consensus tending to center on the mid 70s.

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