What a difference a day can make in trader psychology. The newsof extra El Paso capacity and lack of a PG&E OFO causedCalifornia prices to plummet around a dollar or more in both theswing and bidweek markets Wednesday, while other quotes for thelast day of August were flat to mildly softer in the East andsurprisingly stronger in the Rockies.

Obviously people attached more significance than some hadexpected to El Paso’s announcement that Line 1110 on the SouthMainline would be able to flow up to 400 MMcf/d through Pecos RiverStation effective with intraday scheduling Wednesday, a marketercommented.

The reason for Rockies/Pacific Northwest points to jump morethan 15 cents was a mystery, one trader said. “I talked to severalothers about it and nobody could come up with a good explanation.”However, a marketer suggested the increases were related tofirmness in the intra-Alberta market, which he reported rising intothe C$5.30s. Provincial prices went up along with the screen in theafternoon after the storage report, he said, but they were alreadystronger that morning, likely due to some drafting of the NOVAsystem.

Although heat records are being set this week in some parts ofthe South, eastern prices still had to contend with almost nocooling load in the Northeast and Midwest. They also wereinfluenced by Tuesday’s expiration-day softness in the Septemberfutures contract, and the October screen was only slightly higherWednesday until AGA said that afternoon that 52 Bcf had beeninjected into storage last week. That was 17 Bcf less than in thecomparable period of 1999 and increased the year-on-year refilldeficit. The slippage in western inventories grew even greater as anet 5 Bcf withdrawal was reported for the Consuming Region West.

Katy prices slipped relative to the Houston Ship Channel, butremained strong compared to the rest of the Gulf Coast and WestTexas, an aggregator noted. The only time it makes sense to buyKaty is when it is trading at either a discount to Waha or morethan 6 cents below the screen, “and neither of those conditionshave been prevalent lately,” he said. “Economically it only makessense to move gas west if Waha is very strong, and storage playerswould rather buy relatively cheap Louisiana supply that existsright now than pay up for Texas gas.” Katy traded at more than adime premium to many Louisiana points Wednesday.

September numbers, which had been reported softening a tadTuesday, started to rebound slightly yesterday afternoon after thescreen reacted bullishly to the storage report, sources said. Thatwas true even in the diving California market. A marketer who soldborder gas falling in 10-cent increments down to $5.60 during themorning and thought the fall might continue to the $5.30s said hewas able to unload “quite a bit” that afternoon at $5.85. ButOctober basis at the border was still getting hammered, he said.October basis quotes at plus 188-190 Tuesday had shrunk to plus 110Wednesday morning and kept dropping later to plus 61-71, themarketer reported.

September California border prices started just a little softerin the morning but quickly went into free-fall, another tradersaid.There didn’t seem to be any one company leading the decline,”just everybody joining in,” he added. He still thinks the borderindex will set a record at well over $6.00, but that will probablycome out of an overall range approaching two dollars.

A low-pressure system was just offshore from the North Carolinacoast, the National Weather Service said, but it was consideredunlikely to develop or do anything but produce heavy rains in theeastern part of the state as it moves inland.

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