A California spike that sent border quotes skyrocketing as highas $33 and was accompanied by moderate firmness in the Southwestbasins stood in sharp contrast to a softer overall market Thursday.Outside the California/Southwest region, prices tended to rangefrom barely lower in the Rockies and at a few scattered Gulf Coastpoints to down 15-20 cents at Northeast citygates.

The Southern California border averaged almost $25, and thePG&E citygate and Malin soared by lesser amounts, largely dueto expectations of a big chunk of El Paso supply getting taken offthe market, sources said. A marketer explained that the pipelinehad planned to take Keystone Station in the Permian Basin out ofservice for maintenance starting today (see Transportation Notes),causing 400 MMcf/d in shut-ins through the weekend. But due to alow-linepack OFO, El Paso postponed the work until Saturday.However, the postponement wasn’t announced until about 10:30 CST,the marketer said, and by then nearly all border trading had beencompleted on the presumption that there would be a 400 MMcf cut inPermian gas.

Most of the supplies that suddenly “became available” got pushedback east, he continued. The result was strong San Juan and Permianmarkets but weakening Waha prices, he said.

In addition to the El Paso action, there was an appreciablevolume amount of allocations for Kern River supplies into the SoCalGas system for March 1 flow, another trader said. While he wasuncertain if that was also an issue for today’s gas day, he thoughtit probably contributed to the price frenzy. He estimated 1.5 Bcf/dwas nominated on Kern River into SoCal, but said only about 400MMcf/d can actually be delivered.

Far from the western hullabaloo, a Northeast-oriented marketerreported a rather quiet trading day. Northeast citygates recordedsome of the day’s biggest declines despite cold weather that isexpected to cause “genuine heating demand” for the next few days,he said. Even Texas Eastern was advising shippers to make sure theyprovided enough supply receipts to cope with the cold spell, henoted. Screen softness of about a nickel was about the only reasonthe marketer could see for Thursday’s cash drops.

Chicago prices ran up at first, only to come crashing back to$5.29 late, a Houston-based source said. “Throughout the first hourof trading, [Chicago] buyers and sellers were matching up nicely,”she added. “Then at about 9:30 there were no more buyers.”

How can you tell a strong market from a weak one — besides theobvious answer of price movement? As the year began, Sonatestimated its cumulative system cash-out imbalance for December2000, when overall prices were hitting record heights, at more than2.5 Bcf short. But for January and February of 2001, the estimatedimbalances were both long by more than 1.8 Bcf and 1.2 Bcfrespectively, Sonat said.

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