This week’s moderate bull market came to an end for the mostpart Wednesday as cash prices bowed under the weight of decliningfutures to range from flat to down a little more than a nickel.

Crude oil futures, after realizing a spectacular gain of nearly$2 Tuesday, showed they could plunge even faster with a decline ofnearly $3 Wednesday. The dramatic reversal was attributed toreports that Iran was relaxing its opposition to productionincreases among the OPEC nations. Sources also cited a late-Tuesdayreport from the American Petroleum Institute showing a sizeableincrease in U.S. crude oil inventories last week.

Spot gas prices are starting to fall mainly due to futuresweakness, one marketer said. Tuesday’s screen decline set the stagefor cash weakness Wednesday, and both cash and futures are weaker”because you can only struggle higher for so long without gettingany weather support.” Actually a cold front was moving from theUpper Plains into the Midwest and due to reach the Northeast, butit wouldn’t be severe enough to make much difference, traders said.The buyer for an East Coast utility observed, “Temperatures are somild here that we’re not withdrawing any storage and making veryminimal purchases of new gas.”

“We should have declared Snow Day and gone home early,” said aCalgary trader reporting snow in Alberta. However, intra-Albertaprices still fell about a nickel into the mid to high C$3.40s andtemperatures are expected to warm up again by the weekend, he said.

Sumas prices started out flat due to screen firmness earlyWednesday morning but fell about a nickel as futures weakness setin, a marketer said. Reports of production problems in northernBritish Columbia are untrue as far as he was aware.

San Juan Basin prices in El Paso’s Bondad pool, which were at a3-cent discount to Blanco pool numbers Tuesday, pulled closer toparity with Blanco Wednesday. Bondad prices may have gottenunexpected support when El Paso said work on the Bondad (CO)Station’s 2A turbine, which was scheduled for Wednesday only andcurtailed 95 MMcf/d of capacity, had to be extended through today.

A Texas trader regarded AGA’s report of a 29 Bcf storagedrawdown last week as mildly bearish, saying expectations had beenfor about 50 Bcf. But she didn’t think it really had much marketimpact.

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