Michigan citygates and intra-Alberta numbers stuck out like sorethumbs Wednesday in an incremental cash market where all otherpoints were dropping between a nickel and 20 cents. A furtherdecline in the November futures contract combined with continuingmild weather and the perception that Hurricane Mitch is only a veryremote threat to offshore production to cause the cash softness,sources said.

Intra-Alberta’s rise into the $2.00-20 range held no surprises,since the point was still recovering from Monday’s tremendousplunge. The numbers swayed back and forth within that range as snowthat started in Calgary around lunchtime had people thinking, “Thismust be a cold snap and intraprovincial usage will go up,” onetrader said. He thinks Alberta demand will go up only about 100MMcf/d, “but it was the whole mentality that caused these [price]gyrations.”

Michigan’s ability to withstand an otherwise quite bearishmarket was a bit of a surprise as the state’s two biggest LDCs sawextremely wide price ranges. Consumers Energy remains in acurtailment mode, so the limited supplies available there hadpeople scrambling to cover any short positions and willing to payas high as the low $2.20s, a trader told NGI. That demand wasspilling over into the Michigan Consolidated system, even thoughprices there did not run up as much as those for Consumers, hesaid.

Columbia Gas fell almost a dime but still managed to widen itslead over Texas Eastern M-3 and Transco Zone 6 citygates to morethan 20 cents. The premium for Appalachian pool gas got strongerbecause of the continued inability of interruptible gas topenetrate TCO interconnects, a marketer said.

November bidweek quotes went lower again along with the screen,but many points were seeing what one source called “a bit of a deadcat bounce” as the day went on. A trader reporting Transco Zone6-NYC in the high $2.30s and Columbia-Appalachia at $2.21-26 saidboth points rose about a nickel after the November futures expiry.Another source said San Juan-Blanco got as low as $1.85 in themorning but later creeped back up to $1.91.

A marketer reported general Midcontinent bids at $1.92-94 andasks at $2.00. A lot of business was done at minus 10-11 basis whenthe screen was at $2.20, he said, “so it is a difficult pill forsellers to swallow now that they’re having to let their gas go forless than $2.”

The convergence of October and November cash pricing was gettingbetter Thursday, according to a marketer doing Southern Californiaborder deals for next month on either side of $2.30, or about 2-3cents under his incremental border quotes. Right now buyers andsellers are in a “cat and mouse routine,” trying to influence themarket in their direction, a Western trader said. At the pricelevels she is seeing, “I would want to be short the first two weeksof November and long the second two weeks.”

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