With freezing temperatures essentially a no-show throughout theU.S., cash prices continued to decline in most markets Wednesday,with the biggest declines occurring in the supply-engorged Rockies.However, except for western points most of the softness was mild,and some Northeast citygates registered moderate upticks.

CIG topped the drop list with a fall of 15 cents, chiefly spurredby a high-linepack OFO (see TransportationNotes). But prices on other Rockies pipes were also getting beatendown by fears of similar OFOs, sources said. Without issuing an OFO,Public Service Co. of Colorado and Cheyenne (WY) Light Fuel and Powersaid they will not accept imbalance paybacks through the Nov. 15 gasday and will extend that deadline if current system conditionscontinue. And a producer said he had been warned by Questar to havetakeaway markets for his gas or else. “There is no ‘floating’ gas intothese [Rockies] pipes at all,” the producer added.

San Juan Basin prices felt some downward pressure from Transwesternmaintenance at the Southern California border (Topock) that beganWednesday and cut deliveries into the PG&E system to zero (seeDaily GPI, Oct. 6). The SoCal Gas systemwas pretty full, a marketer said, so it didn’t provide much of aviable alternative. However, the constraint should be easing Fridayas Transwestern is scheduled to restore service at the PG&Einterconnect Saturday.

In the Northeast, it was a different story entirely. A buyer whomade his Transco Zone 6-NYC purchases early in the low $2.70s saidhe was hearing of $2.80s deals later on. Whether that indicates apotential turnaround from the big slide in prices recently probablywould depend on Wednesday afternoon’s AGA storage report, he said.

A Midcontinent marketer, who also saw prices rising fromearly-morning lows, rejected any rebound notions after AGAestimated 12 Bcf in injections last week. “That’s definitelybearish with the traditional withdrawal season already begun,” themarketer said, adding he’d heard prior expectations of 7-8 Bcf ininjections.

Gas in the Midcontinent seemed to find a home fairly easilydespite the apparent lack of demand, according to an Oklahomasource. On Tuesday the “hot” pipe was NGPL, he said, but Wednesdayit was ANR. He found it economical to buy ANR field supplies andtransport them to Northern Natural’s demarcation point. The traderperceived that utilities also were buying substantial amounts offield gas for transport to the market areas. They have recallablecapacity, he explained, “and with prices at these [depressed]levels it makes sense to use your own transport from the field.”

Even with prices plumbing depths of 50 cents or so below index,another Midcontinent source believes they still aren’t too shabbyfor producers, considering the weather and storage situations.”Let’s face it,” he said. “Prices aren’t at $1.25 and gas isn’tgoing to be shut in or otherwise pulled off the market any timesoon.”

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