At the risk of sounding like a broken record, prices continued to slide Wednesday for pretty much the same reasons that they have through nearly all of the May aftermarket so far: a relative dearth of weather demand for either heating or air conditioning; a weak screen; and a decidedly blasé attitude about any urgency in refilling storage.

The non-PG&E softness tended to be fairly moderate, with most points dropping between a nickel and about 20 cents. The rare tiny uptick occurred at the Florida citygate despite a high-linepack OFO continuing Wednesday on Florida Gas Transmission (see Transportation Notes). One source could only speculate that gas has become competitive enough with fuel oil again in the state that fuel switching was outweighing the OFO’s effects.

As a measure of how far prices have fallen since the halcyon days of late last year and early this year, the last time Henry Hub averaged less than yesterday was in Aug. 2, 2000 trading (for Aug. 3 flow) when GPI recorded the Hub at $4.04. On Aug. 3 Henry Hub was at $4.22 and not destined to fall back below $4.20 until May 9, 2001. Also, Trunkline and Gulf South in the Gulf Coast got a few quotes below $4 yesterday along with NGPL-Midcontinent and Reliant-east in the Midcontinent.

The market mood seems to be shifting, a Houston-based trader observed. “Producers are starting to wonder if maybe they should capture as much value for their gas as they can before there’s further price erosion, which looks pretty likely.” That’s a radical change from not too long ago when the speculation was about how close to a yearly bottom the market was, he said.

Even as power shortages threatened to push California into a third straight day of rolling blackouts, gas prices kept fading at the state’s four major trading points. Although Malin and border-SoCalGas declines were fairly mild and in line with the rest of the market’s softness, PG&E citygates and border-PG&E quotes registered the day’s biggest drops by far. The utility did not issue an OFO, said a Calgary trader, but its linepack was rising toward maximum target levels.

A South Texas Nuclear Project unit tripped off-line unexpectedly Tuesday, and that tended to raise trading volume appreciably at Waha, a marketer said. However, the Waha price impact was negligible as “nearly everything went out weak anyway,” she added.

AGA reported 108 Bcf had been injected into storage during the previous week, which was appropriately interpreted as adding to already bearish feelings. However, one trader expects next week’s volume to be less, predicting a maximum of only 85 Bcf.

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