Traders finally came to view the cash market Thursday much aspolice would view a vagrant: they’re suspicious of somethingwithout visible means of support. The result was predictable asprices fell anywhere from 2-3 cents at a few Gulf Coast points to15 cents or more in the Rockies/Pacific Northwest.

Northeast citygates formed a mirror image from recent days. Whatwent up in mostly triple-digit increases recently was coming downin mostly triple-digit decreases.

Moderating weather and a mild drop in March futures duringmorning cash trading were enough to outweigh Wednesday’safternoon’s large storage withdrawal report, sources said.

There was very little demand at all in western markets, a coupleof marketers said. Northwest-domestic pricing was going down in ahurry after starting just above $2.50, a marketer said. “I wasbehind the train trying to jump on” as he started buying when pricelevels hit $2.44 and followed them on down into the $2.30s.

One source reported doing Southern California border deals at$2.67-73 into SoCal Gas and at $2.65-69 into PG&E. That reflectsthe lesser value of Topock deliveries into PG&E than into SoCal,he said, which is why the Enron-El Paso deal went south. (see DailyGPI, Feb. 3 and this issue).

Intra-Alberta numbers fell about C8 cents as a flood of storagesupplies came into the market, one trader said. Provincial storagecustomers were withdrawing about 1.4 Bcf/d compared to about700-800 MMcf/d previously, he said.

Despite the general softness, a Houston-based trader believesthe lesser Gulf Coast declines were largely due to continued largeshut-ins of deepwater Gulf of Mexico production. All gas in watersover 1,000 feet is casinghead gas that must be produced inassociation with crude oil, he explained. The Poseidon crudepipeline has been down since around Jan. 21, which the traderestimated is affecting about 400 MMcf/d of associated gas. That’sthe chief reason the Tennessee Zone 1 and Texas Eastern-East LApools have been outperforming Henry Hub quotes for some time now,he said.

There’s no mystery about why Henry Hub cash has been tradingwell above the screen lately, the trader went on. “It’s justifiedwhen you realize March [futures contract] is the end of winter andFebruary [cash] is still a hard-core winter month.” Daily spot gashas been trading around $2.80-90 in the last couple of days, hesaid, adding, “You try to find a $2.90 print on the Nymex screen.”Everybody that has available storage “has to sell it at these highprices,” he concluded.

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