Arguments likely raged all day Friday over whether the gasmarket was overreacting to Tropical Storm Bret or not. But as evena member of the “overhyped” camp reluctantly conceded, there was nodenying that cash prices ignored mild northern market-area weatherand the usual drop in weekend load to achieve gains of up to adime. The smallest showings of flat to only about a nickel highercame at western points, which are more insulated from potentiallosses of Gulf of Mexico production.

As recently as mid-July Henry Hub traded in the low $2.10s (seeDaily GPI, July 13). Since then the Hubhas experienced a meteoric rise based on severe heat waves, surgingfutures (for both gas and crude oil), relatively anemic storageinjections that keep increasing the year-on-year deficit, and mostrecently the 1999 season’s first genuine Gulf hurricane threat. OnFriday Henry quotes fell just short of surmounting the $3 hump. DailyGPI had to go all the way back to the Nov. 20, 1997 issue to find thelast time the Hub was in the high $2.90s.

“Everyone is staring at the screen in amazement,” especiallywhen it notched a high of $3.015 before eventually settling back to$2.938, a marketer said. He counted himself as an “overhyped”disciple, but said cash traders could hardly hold back in the faceof the futures strength.

Much like the screen’s late retreat pattern, Gulf Coast pricesbegan the day up 7-8 cents, crept a little higher and then droppedback about a nickel in the late going, a marketer said. His firstHouston Ship Channel deals were at $2.98 and the last one was at$2.92.

A western source who had just gotten back from vacation had anattack of “sticker shock” when he saw how much prices had risen.Only the screen’s strength kept prices from softening in the West,he said. Another surprise was that neither of the big CaliforniaLDCs had a high-linepack OFO in place for Saturday, he said.However, he and others said they would keep vigilant eyes out for apossible PG&E OFO Sunday.

Most people seem to think Bret is a non-event for cash traders,one marketer asserted, but it was still amazing to see weekendprices run so high even with the storm considered unlikely to enterthe Gulf production area. But his doubts about the Bret threat wereundermined somewhat by the National Weather Service. The storm wasexpected to graduate to hurricane status no later than Saturday,NWS said, and its northward movement as of Friday afternoon wouldcarry it into the South Texas offshore area if continued. “Allinterests along the Texas coast should monitor the progress of Bretover the weekend,” NWS said.

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