There was no surprise when prices continued to fall Friday, but what many didn’t expect was eastern quotes holding up as relatively strongly as they did. Nearly all points in the East fell by about a dime or less, and a few scattered ones eked out small gains. Meanwhile, the West fulfilled predictions of steep drops that were fueled primarily by high-linepack OFOs by both of California’s biggest LDCs.

Traders saw little reason for the East’s moderate softness, since except for some predicted low temperatures in the 30s and and 40s in the Midwest, weather remained a benign market factor. A couple suggested that even though Hurricane Michelle was still aimed at South Florida, nervous buyers may not have wanted to risk short positions over the weekend, just in case Michelle veered toward the offshore production area.

There seemed to be fairly strong Texas intrastate demand, a Gulf Coast marketer said, but he didn’t know why because air conditioning load was light. Power generation demand in Louisiana was almost non-existent, he added.

Compounding the uncertainty about mild eastern softness, Reliant and Sonat cautioned shippers of potential OFOs because of their limited storage injection capabilities, yet prices on both pipes fell only about 6-8 cents.

For western traders, the only story was the OFOs by PG&E and SoCalGas (see Transportation Notes). They had been anticipated, especially since SoCal already had one in place Friday. PG&E waited until most trading had been finished before posting its OFO, but the market’s expectation of it was enough to drive citygates down a little more than 40 cents.

The OFOs’ effect was being felt throughout the West, a marketer said. However, since Waha dropped much less than California points did due in part to its relationship with the intrastate Texas market, Waha was in the unusual position of trading about a nickel above border-SoCalGas and the PG&E citygate. Waha had been 10-15 cents below those points Thursday.

Michelle was expected to become a major hurricane, according to the National Weather Service. At 4 p.m. EST Friday it was about 255 miles south-southeast of the western tip of Cuba and still on a slow northward tracking.

A Northeast-oriented marketer thought it strange to hear the news that Boston and a few suburbs wanted Distrigas of Massachusetts to pay their costs for providing a huge blanket of security as an LNG tanker entered Boston Harbor last Monday night following the lifting of a temporary Coast Guard ban on such shipments. “They don’t seem to realize that without those LNG shipments, their winter heating bills could get fantastically high,” he said. “I hope they don’t feel that such expensive security is necessary for upcoming tankers.”

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