The meltdown of the early December aftermarket continued Tuesdayalthough many points made small rallies late in the day from theirbottom levels of the morning. Prices in nearly all production areaswest of Appalachia sank well below $1.50-a level in the “old days”at which many producers used to consider summer shut-ins. ThePG&E citygate was one of the only points still registeringquotes above $2.

Tuesday’s prices were the lowest recorded for a December daysince GPI began tracking daily numbers in 1993.

Chicago citygates in the $1.40s were about 80 cents below index.Peoples Gas Light & Coke, the city’s primary distributor,issued a Critical Day notice and was not accepting any newincremental volumes on the system from today through Friday, anend-user said.

Overall basis was tight throughout the producing areas as pricesranged from the high $1.20s in the Rockies to the $1.60 area forColumbia-Appalachia. The Rockies market was remarkablyinconsistent. CIG was the pipe with the $1.20s numbers, draggeddown by the weakness in the Midcontinent, which often is thedestination of CIG supplies. By contrast, Northwest quotes in the$1.40s for both Sumas and domestic gas exceeded anything the GulfCoast and Midcontinent had to offer.

A Houston source predicted that “with all the gas in the ground[storage] and in the pipe, pipelines will start issuing OFOs enmasse by Thursday.” A big aggregator agreed, saying that withprices as low as they have gotten, there is strong incentive to”hide” gas by socking it away amid a pipeline’s linepack. She wasdoubtful whether much relief is in sight, noting aftermarketsupplies felt “very long” to her.

Officially the 1998 hurricane season ended Monday. TropicalStorm Nicole was still in existence Tuesday but rapidly fading asit moved northward into the cold waters of the North Atlanticnorthwest of the Azores.

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