End-of-month convergence wasn’t very effective as mostlate-February swing prices earlier this week were appreciablystronger than March indexes. However, except for dropoffs at a fewscattered points, first-of-March convergence with indexes wasfairly tidy. Cold weather spreading into the South was largelyresponsible for initial March aftermarket prices to gain anywherefrom about a nickel to 20 cents over last-of-February numbers.

As a number of sources had expected, AGA’s report of 101 Bcfwithdrawn from storage last week reflected a resumption of growthin the year-on-year deficit and contributed moderately to bullishfeelings. However, after moving into positive territory for a whilefollowing the report, the April futures contract succumbed toselling pressure and went into the red again.

A marketer said his company thought last week’s withdrawalvolume of 81 Bcf had been too low because of the degree day heatingdata for the period in question. However, they had projected areport in the 95-110 Bcf range for this week, so the 101 Bcf figurefelt about right, he said.

Prices fell significantly at the PG&E citygate and SouthernCalifornia border despite the state, after having gone a week withno power alerts, being back under a Stage Two Electrical Emergencynotice again Wednesday.

The Texas market was quite weak in March trading, and thatcontributed to lower prices all the way up the East Coast, onetrader said. Fearing lower aftermarket prices, producers were quickto dump their gas into the March market, he said. However, thatsituation changed considerably for today’s flow as offline powergeneration assets in Texas pressed less efficient gas peaking unitsinto service, he said. The demand was felt quickly as utilities inEast Texas stepped up as buyers, causing Katy to trade at more thana dime’s premium to Henry Hub, he added. Louisiana pipes, however,did not realize the price rises to the extent that Texas did, thetrader said.

A midday earthquake centered southwest of Seattle knocked outelectricity for thousands of area residents. However, early newsaccounts contained no reports of damage to gas lines or otherfacilities.

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