Once again Tuesday the cash market tended to be stronger to theWest and weaker to the East, although neither region was a model ofconsistency. The West had a couple of flat points, while a few inthe East were flat to slightly higher.

With Gulf Coast numbers down by either side of a nickel at mostpoints, a producer in the region said available supplies remainedabundant, “but at least we saw some decent demand starting toreturn.” He thought it was more a result of utilities coming backfrom the Columbus Day holiday than of Northern markets getting abit chillier.

The Midcontinent/Midwest generally was more resistant to Easternsoftness than the Gulf Coast/Northeast. Midcontinent pipes startedthe day on either side of $1.60, their lowest levels of the monthso far, an Oklahoma marketer said. But things started to pop up alittle when the screen temporarily got as high as $2.10, he said.He bought an NGPL-Midcontinent package at $1.66 and heard latenumbers surpassing $1.70. ANR-Southwest continued to see a premiumof almost a nickel over NGPL because of NGPL’s storage injectionconstraints, the marketer said.

But despite the rally for field gas, Chicago citygates keptgetting cheaper throughout the morning, said one trader who paid inthe mid $1.80s at the gate, down almost a nickel from Monday. Thatwas largely due to low market-area demand along with sympathy forthe recent weakness in futures, he said.

“I don’t know,” several sources replied when asked about thecontinuing firmness of Western markets, where increases ranged fromabout the nickel area in the Rockies and Southwest basins to abouta dime in Northern California. But when pressed, they were able totick off some possible explanations: maintenance through Friday ontwo of El Paso’s Blanco Station compressors, constricting San Juangas coming into the mainline; relative supply tightness in theRockies; and lingering storage demand combined with cooler weatherforecasts in California.

Intra-Alberta traders returned from Monday’s holiday to findprices had jumped more than C15 cents into the high C$2.50s. Onesaid there was 50-60 MMcf/d of interruptible gas off the marketthrough Thursday. Also, NOVA was raising its target linepack from12.65 Bcf to 12.8 Bcf in daily increments through Friday. “Astemperatures drop going into the winter, the compressibility of gasincreases, which means you have to pack more into the pipe,” hesaid.

Other Calgary sources noted rising concern that there may not beenough supply to fill remaining storage capacity. Another problemresulted from problems Friday night with the NrG Highway system,causing weekend nominations to get messed up and a scramble for gasTuesday to straighten things out, a marketer said. WestcoastStation 2 pricing in the high C$2.50s was keeping pace with theAlberta upticks, she added. That contributed to a big run-up of 15cents at Sumas.

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