Thursday marked the first time bears took firm control of themarket all week, as most price points fell between a nickel and 10cents. A large majority of the deals were made through the weekend,as many trading offices were expected to be sparsely populated onGood Friday.

The price erosion caused some interesting situations out West,where the Southern California border traded even with PG&Ecitygate for much of the day, and even traded at a premium to thecitygate for a short while, one trader reported. “Inventory levelsat the gate are building and that fact is built into the pricelevels we saw [Thursday]… I estimate a 30% chance of having ahigh inventory OFO for Saturday with much more of a chance of thathappening on Sunday, about 80%.” As of Thursday evening, however,no OFO had been called. Reasons for the citygate softness includedlessened demand because of the long weekend, weak power prices andthe absence of large utility buyers in the market.

The Northeast region took the softness squarely on the chinyesterday, as traders said overvalued price points had no where togo but down. “The screen came off Wednesday afternoon, and itdidn’t mount enough of a comeback [Thursday] morning to supportcash prices,” one Northeast buyer said. “Without that support, Ithink folks realized how over-priced some of these points were andstarted to push them down. Still, prices are extremely strong forthis time of year.” He quoted Transco Zone 6 (New York) trading inthe mid $3.40s, after they had finished the previous day with a$3.54 weighted average. Tetco M3 and CNG Southpoint experienceddrops in the five- to nine-cent range.

Trades at the Tennessee 500 line fell to just above the $3 levelfrom the low $3.10s earlier this week. “Everybody just wanted toget trading done and there was no momentum pushing prices up atall.”

A Chicago-area source said that Commonwealth Edison’s BraidwoodNuclear facility tripped off earlier this week, affecting prices atthe Chicago citygate. However, the plant was back to 100% Thursday.He added that the main utilities in the region nominated gasthrough the weekend yesterday, all but guaranteeing a lightvolume-day in Chicago today.

Even Canadian trading was not immune to the fall, as Aeco priceswere trading at least a dime less than the previous day’s levels.”Our high was C$3.84 and our low was C$3.74. That is well belowwhere we were trading [Wednesday]. But I don’t look at the day ascompletely price-negative, because our last trade was in the lowC$3.80s, which was definitely on the high end of the tradingspectrum.” She added that her office believes Aeco prices willregain their positive track early next week.

Other traders also shared bullish sentiments about priceactivity next week. “The relative softness for the weekend came asno surprise to me,” said a Midcontinent aggregator. “However, 20cents above index isn’t really that soft..People seem to beanticipating the milder weekend weather. Overall, I thought thatthe AGA storage number [of a 25 Bcf withdrawal] released Wednesdaywas quite bullish. Bidweek will end up stronger than the day marketis reflecting [right now].”

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