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California OFOs Depress West; Eastern Softness Milder

California OFOs Depress West; Eastern Softness Milder

Weekend prices drifted lower by varying degrees Friday, ranging from barely a penny down on a couple of Gulf Coast pipes to double-digit decreases throughout much of the West. A flat screen provided no cash guidance, traders said, so it was primarily milder weather plus the typical drop in weekend load that prompted moderate declines of about a nickel or less at most eastern points.

There was additional reason for prices to get depressed in the West, however. Both of California's two giant distribution systems, Southern California Gas and Pacific Gas & Electric, had high-linepack OFOs in place for Saturday (see Transportation Notes). Not only were the Golden State's three major price points down by more than a dime, but similar negative price effects from curtailed deliveries into California rippled back into the Rockies and Southwest production basins.

The only western points with small declines tended to be Canadian-oriented, such as Sumas, Stanfield and intra-Alberta. Not all traders in the city attended the Calgary Stampede rodeo parade Friday, but the annual event drew enough of them out of the office that few wanted to bother with fixed pricing, preferring to index most weekend deals, one source said.

The weekend market slump could have been worse, a Gulf Coast marketer said. Demand was consistent with gas trading more than a dime below index, he observed. "Anybody with a cranny or a crevice in which to stick gas" (storage, that is) was eager to buy Gulf supplies in the mid $2.10s, he said.

A trader quoting Chicago at $2.18 said citygates trickled down throughout the morning trading session as sellers scrambled to unload gas for a relatively mild weather weekend. Chicago basis for August is currently plus 3.25, he said.

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