“The market is tanking. That pretty well sums it all up in anutshell,” was how a Gulf Coast marketer characterized the pricesituation Wednesday. Only California, where a series of rollingblackouts began in the northern part of the state (see related story), failed to participate infurther price declines that were mostly between about a quarter and 50cents.

There are absolutely no signs of bullishness anywhere at thispoint, several traders agreed. Any cold weather currentlyresurfacing or on the immediate horizon likely won’t be significantenough to generate a price rally, they said. AGA’s report of only103 Bcf getting taken out of storage last week continues toalleviate worries about storage volumes being inadequate to getthrough the winter. And a screen plunge so steep that trading hadto be halted briefly when the declines hit Nymex’s dollar limitvirtually guarantees that a cash rout will be on today, the traderssaid.

Futures contracts in crude oil and heating oil also were fallingWednesday.

“Winter is essentially over as far as we are concerned,” said aneastern utility buyer. “Our storage situation is very good, and wesee little other than a long siege of bad weather that could causeanything but mild price rebounds.”

Actually the Northern California blackouts have little effect onthe state’s gas market, said one source, other than all gas-firedpower units not down for urgent maintenance or forced to shift tofuel oil being pressed into service. “But that’s status quoanyway,” he said. He attributed Wednesday’s conspicuous strength ofSouthern California border quotes (more than a dollar higher)instead to reports of Enron having bought a large amount of bordergas the day before as baseload at prices above Tuesday’s swingnumbers. That probably will keep border prices strong for the restof month, he said.

A producer said Questar’s startup of compressor-drivenwithdrawals at Clay Basin storage Tuesday “means we’re now in thedecline curve on storage deliverability in the Rockies.” Thingswill get worse when liquids start building up at Northwest’s GreenRiver Station, he said. It will hurt interruptible storage playersmost, the producer added. “They’ll have to stand by while the firmplayers go first.”

A large aggregator expects the February bidweek to be evenslower than usual in getting going and completed due to the massivesoftness developing in the January aftermarket. Buyers will put thesqueeze on sellers over every penny, he predicted. “They [buyers]probably would like to get an affirmation from the groundhog, too,but bidweek will be over by the time he shows up.”

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