The fundamental of having snow and/or frigid temperaturescontinuing to pervade most markets was still around, but cashtraders must have been looking at hints that at least a moderatethaw might begin in several areas today. They again sent priceslower by about a dollar or more Wednesday in most cases.

Declines at California and Pacific Northwest points slowed downconsiderably, going from four digits Tuesday to three digitsWednesday except at the Southern California border.

“I can’t figure it out,” said a Northeast-oriented marketer. Hereported talking to several gas buyers in the region, “and theywere really socked by the snowstorms and bitter cold. I see nothingbut mostly cold weather in Northeast through the end of the year,yet prices are dropping like a rock.”

The screen provided little guidance as it remained only mildlysofter while cash was trading during the morning and waited untilafter the AGA storage report (158 Bcf in withdrawals last week)came out before diving for a closing loss of slightly over 60cents. That didn’t make much sense either to the marketer since heconfidently expects next week’s AGA report to top 200 Bcf becauseof this week’s arctic blast.

One trader chalked up the tremendous price erosion over the lasttwo days to “everybody [being] long on anticipation and offers, sothe market had nowhere to go but down.” To another source, somepeople previously had supported the market through Monday with”panic buying” based on expectations of the cold, but now that ithas finally arrived “they’re not panicking any more.”

Noting that any warming trend would still leave many areascolder than they had been prior to this week, a Midcontinent tradersaw a chance for a cash rebound today but conceded that futuresweakness probably wouldn’t allow that. In addition to the gascontract’s plunge, heating oil and crude oil futures also took bighits Wednesday. But as the trader noted, “There’s still a lot ofwinter left to go.”

Despite more huge price decreases in California, the SoCalborder was averaging $18.52 as what had seemed to be an easing ofthe state’s power problems turned south again. The Cal-ISO said itwent to a Stage Two Electrical Emergency in the afternoon “aftercredit concerns involving market participants stopped the flow ofseveral thousand megawatts of Northwest imports into California”(see related story). Although a Stage Three alert had not beenissued as of press deadline, a gas trader in the state said hefully expected one accompanied by rolling blackouts.

Same-day peaking power went as high as $1,500/MWh in postings bythe California Power Exchange. In a sign of possible easing of theelectric crisis, day-ahead numbers topped out at $667.

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