It shouldn’t have shocked anyone when the October aftermarketstarted out weak; after all, a number of sources had beenpredicting such a situation to NGI all week. The softening fromindex levels in swing deals done Thursday for today-only flow wasdivided somewhat on a geographic basis: declines of 15-20 cents ormore in the East were considerably greater than those in the West,which generally were less than a dime. California points evenmanaged about flat showings.

Traders attributed the relative western strength to hot weatherin California and the desert Southwest combined with coldtemperatures in the Pacific Northwest and northern Rockies (it wassnowing again in Calgary Thursday). Reports conflicted aboutwhether “fish flushes” were significantly lowering hydropowersupplies in the Northwest; “hydro is a wild card, and differentpeople have different perceptions about it,” one source said.Certain people who know the truth about the hydro situation won’tdivulge it because that would give away a market advantage, headded. However, he thinks the smaller price drops in the West weredue more to weather demand and several nuclear and coal plantsbeing down than to the possibility of less hydropower.

Many traders expect cash prices to take it on the chin againtoday due to lower weekend demand and the lack of positive weatherfundamentals in nearly all markets outside the West. However, theyalso saw a chance for a rebound next week, citing forecasts for acold front moving into the East and a lot of rainstorms and othertropical weather activity in the Caribbean Sea. However, as ofThursday none of that activity had strengthened beyond a tropicalwave.

A marketer found another reason to expect a cash rebound: thebig disparity between the screen and first-of-the-month swingprices. November futures sank to just below $2.75 while cash quotesfor Henry Hub averaged about 40 cents lower and even fell into the$2.20s in some cases. “At some point there will have to be aconvergence, with both moving equally,” he predicted.

Despite the “tanking” of Gulf Coast numbers Thursday, a largeaggregator said they were recovering fairly strongly in theafternoon as storage buying increased. “The spreads right now forNovember and December were just too good to resist,” she said.

A western trader found it strange that swing PG&E citygateprices would drop from around $3.00 Wednesday to the high $2.80sThursday while electricity prices in California were shooting up toabout $60/MWh. “People can make money selling power made with $3gas and make even more with $2.88 gas,” she said. “I realize thatseparate months are involved`, but that kind of disconnect seemsreally bizarre.”

Influenced largely by continued screen weakness, bidweek quoteswere tailing off in several markets. A marketer who had beentrading Houston Ship Channel for October in the low $2.50s managedto pick up a last-day package at $2.40.

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