Traders correctly assumed prices would keep dropping Thursday,but many likely were surprised by how much the overall downtrendslowed. Except for some sizeable declines in the Rockies/PacificNorthwest, most points fell by about a nickel or less, and a fewregistered flat to up a smidgen.

One large marketer theorized that the cash market had alreadyabsorbed quite a bit of bearish influences this week, “and therereally wasn’t much new [Thursday] to keep pushing prices a wholelot lower.” After functioning as a drag on cash in the previous twodays, the futures screen was essentially neutral yesterday andseemed to have difficulty deciding whether it wanted to be a tinybit higher or a tiny bit lower, he said. He also noted that thecrude oil and heating oil futures contracts made substantial gains.

“I think prices possibly could stabilize in this area for theweekend,” the marketer continued. “Then we’ll come in Monday to seeif we have any weather on the horizon.” Right now the 14-dayforecast is still bearish, “but maybe something will show up in thedays between now and Monday,” he said. The marketer conceded thatif traders don’t catch a glimmer of some seriously cold weather byearly next week, “prices are likely to really crater.”

Although bidweek was still developing slowly, the Novembermarket was getting weaker, several sources said. Chicago basis wasdown to plus 10 Thursday after consistently being quoted in thevicinity of plus 14 before bidweek, a producer said. “Actually bothphysical and paper basis is plus 10,” he added, “because Chicago isstarting to trade at index flat” after being reported atindex-premium previously.

Other traders also reported weakening index deals. AHouston-based marketer said he was trading TGT Zone SL at indexflat to minus 0.25, whereas many Gulf Coast quotes earlier thisweek had indicated index-plus numbers. A buyer said the TranscoZone 6-NYC index premium, while still positive, “is getting beatenup” by going from plus 8 to plus 5. There was a general consensusthat “weather, weather, weather” was responsible for the softness.

Physical basis quotes Thursday included: Transco Zone 6-NYC atplus 57-60; Zone 6 non-NYC at plus 51, Columbia-Appalachia at plus25; Niagara at plus 29.5; Tennessee (both 500 and 800 Legs) atminus 7.75; TGT Zone SL at minus 3-2.75; Columbia Gulf-onshore atminus 2.75; and Southern California border at plus 40-45.

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