“There’s a lot of gloom and doom all around,” commented a Midcontinent marketer. While the downhill slope for cash prices got a bit less steep Wednesday, no one was ready to argue with the marketer’s contention. Except for larger declines in the Rockies and at the PG&E citygate, most of the downticks were a dime or less, compared with overall drops in the teens the day before.

The PG&E citygate, in achieving Tuesday’s only gain (a small one of 3 cents) had been buoyed by trader expectations that a low-linepack OFO might be an issue, a western trader said. Since the OFO didn’t pan out, he expected the point to “drop like a rock” Wednesday. Sure enough, gate quotes registered one of the day’s largest losses of about 15 cents.

The fundamental market weaknesses of mild weather and close-to-full storage inventories have seen little change in recent weeks, sources said. However, the erosion of the national and global economies, especially in those areas affecting energy use, is adding more downward pressure on gas prices, they said.

“Oil prices are plunging just like gas is, and we have to believe that will continue because the airlines will be buying much less jet fuel” and other industries will be cutting back operations, said one trader. “Just look at Boeing announcing 31,000 layoffs. If we don’t get some cold weather early, this market could get really ugly.” He found it interesting that the Weather Channel’s website has an article anticipating a colder than normal autumn, but added, “It [colder weather] has to happen in the Midwest and Northeast; it won’t help much if it’s in the Rockies, Southwest or Upper Plains, where not as many people live.”

A Gulf Coast marketer was thinking similarly. “The economy is tanking in all sectors, and I think gas is just foreshadowing the [price drops of] other products,” he said. Some people think the gas market won’t go below $2, but they’re naïve, he said. “We’ll see the market go through $2 like a hot knife through butter.”

Some sources were bemused, others a little angry after the American Gas Association postponed the regular Wednesday afternoon storage until this morning (see related story.) “What a joke about AGA,” said one. “You get a report out the day after terrorist attacks and the next week, when everybody is primed for the new one, you delay it a day. They just can’t get it right.” However, he and other traders did allow that the suspension of trading on the day of the attacks and the minimalist nature of market activity through the rest of the week may have made it more difficult than usual in reporting storage data to AGA.

Atlantic tropical storm activity remained benign. A disturbance east of Honduras and Nicaragua was drawing some attention, but it was considered most likely to do little more than bring rain to Central America.

The gas industry wasn’t immune from the Nimda worm that has been corrupting computers worldwide. Enron said it had to move its HotTap bulletin board operations offsite Tuesday and Wednesday because of Nimda-related Internet connectivity problems and difficulty in sending e-mail notifications. An El Paso Corp. spokeswoman said Nimda was striking there also, and their head of information technology thought it might be the worst virus problem yet. However, operations were maintained at normal levels by both pipeline firms.

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