Late-November swing prices got “crushed” Monday, burdened bothtechnically by a slumping futures screen and fundamentally by acontinuing surplus of unseasonably warm weather, a Texas-basedproducer lamented. Virtually all points dropped between a nickeland about 15 cents, with declines in the vicinity of a dime beingmost common.

Hardly anyone doubts there is room for prices to continue lower.The market outlook is especially bleak for the four-dayThanksgiving Day weekend. In addition to the normal falloff in gasdemand, holiday prices will be further depressed by the injectioninflexibility resulting from nearly-full storage inventories invirtually every region.

Pipelines that haven’t already issued OFOs are almost certain tohave one in place for the weekend, a Gulf Coast marketer said,adding she was practically certain there would be an OFO onTennessee. That creates something of a quandary since high cash-outprices relative to current market levels entice traders to go longon the pipes, the marketer said. However, that could easilybackfire if OFOs force them to liquidate long positions rapidly,particularly because quite a few pipelines have already declaredthey are not accepting imbalance paybacks until further notice, sheadded.

“Most Gulf points averaged under $2 [Monday], and the ones thatdidn’t will end up under $2 [today],” a producer said. Henry Hubfell to the low $2.00s Monday, he noted, “and no change in thedeclining trend is apparent.”

Reflecting November’s relative drought in gas load, the buyerfor an electric utility in the south-central U.S. said she hadn’tbought any gas in so many weeks that “I’ve almost forgotten whatit’s like.” That utility is among many anticipating few if any spotgas purchases for December.

An “interesting” bidweek is shaping up, in the sense of what isreputed to be an ancient Chinese curse: “May you live ininteresting times.” A couple of large producers told Daily GPI theyhad done the majority of their December sales last week or evenearlier, and both were glad to have done so in light of thescreen’s extreme weakness in recent trading. Both expected to wrapup remaining deals for bidweek before Thanksgiving.

Meanwhile, “buyers are just watching the market come their way,”a big aggregator noted. In contrast to the feelings by the aboveproducers and others that most December trading will be completedby Wednesday afternoon, an eastern utility buyer expects a “fairamount” of business of activity to hold over until next Monday andTuesday. “Trying to trade for next month is quite challenging,” hesaid, adding that he was making absolutely no headway in that areaMonday.

Few expect Wednesday’s Nymex settlement or the subsequent AGAstorage report to stem the usual tendency of traders to clear outof the office early when heading into a holiday weekend. “The Nymexwill close at noon Wednesday and there won’t be any Accessafter-hours trading, so I think most people will be heading homesoon after lunch,” a producer said. There’s not much point inanyone’s sticking around to see what AGA says later that afternoon,he said; “what could they do about it at that time anyway?”

The feeling that this will be a bidweek of relatively few fixedprices was noted by several GPI sources. And nearly all indexeddeals are reported being done negative to the eventual index.Premiums to index are extremely rare, according to a producer. Hewas hearing Chicago citygates at index flat, but virtually allfield gas was trading at index-minus. He reported Panhandle Easternbasis at minus 12-13, which would have put fixed prices around$2.05-06 Monday. However, a marketer said Panhandle basis hadtightened to minus 11.25-10.75.

Transco Zone 6-NYC basis had shrunk to plus 46-47 Monday, abouta dime less than last week, a buyer said. Other basis reportsincluded Tennessee Zone 0 at minus 11, Columbia Gulf mainline atplus 2, Columbia Gulf onshore at minus 4.25, ANR Southeast at minus8 and Transco Station 45 at minus 4. That last Transco basis isfarther back than normal, said the reporting producer; it’s usuallymore like minus 2.

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