For the most part, late-December incremental prices continued todrift lower by small amounts Tuesday in quiet activity as tradersincreasing focused their attention on January business. Evenbidweek was still dragging, complained a Midcontinent producer;”there’s lot of talking, but few actual deals.”

Transco’s Zone 6-NYC pool continued to surpass other Northeastcitygates by about $1.30 or more. There’s nothing new in thatmarket situation, traders said; when transportation capacity isinsufficient to meet total demand, prices go much higher for thegas that is able to get through.

Transco will boost moderately the amount of IT available throughthe Linden (NJ) Regulator Station bottleneck Thursday, doubling itto 50,000 Dth/d until further notice. However, that’s not enough toput an effective dent in NYC constraints, one source said. Transcois the primary conduit for gas into the Big Apple, he added,because the city’s utilities and end-users are limited in theiraccess to alternatives Texas Eastern M-3, Iroquois Zone 2 andTennessee Zone 5.

After firming Monday due to screen weakness, January basis wassoftening Tuesday as the screen rose. The Southern Californiaborder was around plus 2-3 Tuesday compared with plus 5-7 the daybefore, a marketer said. Also, he added, San Juan-Blanco was downto minus 19 from minus 13 earlier.

With the screen rising more than 10 cents Tuesday before fadingback at the end, “things are getting a little more exciting,” amarketer said. He saw Midcontinent bids rising from the low $2.10sMonday to the low to mid $2.20s Tuesday. He and other sourcesconcurred that ANR-Southwest and Panhandle Eastern basis was minus9.75-8.5, but NGPL-Midcontinent, which one called “very illiquidand weak,” was quite a bit lower at minus 14-11.

Apparently many traders expect the late-December super-strengthof Transco Zone 6-NYC to last into January. Zone 6-NYC basis hasapproximately doubled since last week to an astounding plus 150, abuyer said, which would put fixed prices in the $3.80s based onTuesday’s settlement. He was hearing Zone 6-NYC being bid at $3.80and offered at $4.15. Meanwhile, Texas Eastern M-3 and IroquoisZone 2 basis levels are well back at plus 70, the buyer said. Aslong as Zone 6 remains within shouting distance of $4, he plans tokeep withdrawing storage that cost $3 or less earlier this year tomake sales.

January fixed-price reports included: Panhandle Eastern andANR-Southwest in mid $2.20s; Chicago in mid $2.40s; and Malin inlow to mid $2.30s. Reflecting significant bidweek softening, onetrader bought a Kingsgate package last Thursday at $2.38 but wasable to make another purchase this week at $2.25.

A Texas buyer said the Northeast market was creating unusualsupply tightness in the Gulf production area. “I’ve been lookingfor some Transco gas in Texas,” he said. “I haven’t had any troublefinding it for the past four years, but this time it’s notably moredifficult.”

With Y2K concerns rampant, one marketer was trying to get”everything wrapped up and locked down early.” Many pipelines areasking shippers to submit nominations for the first week of Januaryin advance; they believe their systems are adequately prepared butwant to provide for just-in-case scenarios.

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