Except for moderate California upticks, the cash marketcontinued to soften Friday but by much smaller amounts than the daybefore. Most points ranged from flat to down about 30 cents, butdeclines were larger at Stanfield and several Northeast citygates.

Several factors influenced trading: unseasonably mild weather inmost regions, another falling screen and the lighter demand of aholiday weekend. However, as one source had suspected Thursday, thefact that all points are now substantially below first-of-monthindexes probably stimulated some storage injection buying that keptweekend numbers from seeing big drops.

California apparently has made it through the latest powercrisis shaken but still intact. The Independent System Operatoraverted having to initiate rolling blackouts Thursday evening bythe slimmest of margins, and although Stage One and Two ElectricalEmergency alerts were extended through Friday, a western gas tradersaid there did not seem to be a serious threat of going to StageThree. Price increases ranged from slightly under a dime at theborder to nearly a quarter at Malin.

A source quoting Sonat on either side of $8.90 estimated there isabout 1 Bcf/d of supply behind Toca, LA, processing facilities, wherethe pipeline has threatened to shut in gas if sufficient processingcapacity was not available by last Sunday (see Daily GPI, Jan. 12). He said traders “are holding ourbreath that Sonat doesn’t have to shut any gas in for lack ofprocessing Sunday and cause us to come back into the office to fixthings on a holiday weekend.”

Northwest traders are bracing for the potential impact whenQuestar begins compressor-driven withdrawals from Clay Basinstorage, which tends to cause problems with condensate liquids atNorthwest’s Green River (WY) Station (see Transportation Notes). “Iguess we’ll find out by [this] week if we have to do anythingdifferently,” one said.

Meanwhile, Opal started trading at $8.80 Friday morning and atthe time Midcontinent gas was barely above $8.40, a marketer said,adding, “We haven’t seen that in a while.” But Opal later fell toabout $8.20, while San Juan prices were running in the $8.60s, hesaid, “so it now makes sense to ship gas south. Northwest Pipelinehas got to be happy about that.”

A Northeastern storage operator said cash fell in what is”basically a weather-driven market right now. Everyone is anxiousto see what the forecasts bring next week.” He added, “Inopposition to basically everything you read out there, we are finein terms of storage. Even if the rest of the winter seesbelow-normal temps, we will have enough gas to last until spring.Currently we are at 58% full and expect to be at 50% full come Feb.1. Last year at this time, we were 76% full, but by Feb. 1 we hadtrimmed down to just 55% full. Even so, we were forced to dump alot of gas on the market last March that needed to come out of theground.”

A marketing firm said it would have a skeleton crew come in forthe Martin Luther King Jr. Day holiday Monday, “but they won’t havemuch to do.” A Calgary source said most traders there also take theday off since there is no Nymex activity and few if any Americanswith which to trade.

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