Except for declines at several of the highest-priced westernpoints, the cash market stayed in an upbeat mood Friday. Gainsranged from about a dime to more than 30 cents, with most between20 and 30 cents. Malin joined the three primary Pacific Northwestpoints (Sumas, Stanfield and Kingsgate) in falling from their loftyheights.

The upticks generally were attributed to colder market areaweather. Those conditions for the Northeast and Southeast werereflected in weekend OFOs and/or IT restrictions by Texas Easternand Sonat (see Transportation Notes). Firming of the January gasfutures contract provided moderate support, although the heatingoil and crude oil contracts were taking a beating in nearby Nymexpits.

Several sources agreed that trading activity had gotten muchquieter for the weekend. “I think that’s just about how everybodypreferred it,” said a marketer. “After all, they had been through apretty hectic week.” Another trader commented, “A lot of peoplewere saying, ‘Let’s just get done quickly for the weekend and lookat things freshly next week.'”

Alliance Pipeline officially joined the transportation gridFriday with little fanfare. A couple of traders said they weren’teven sure if it was operating as advertised. One thought thatintra-Alberta prices, while up strongly along with the rest of themarket Friday, should have gotten more of a boost from the Allianceincrease in takeaway capacity. He wondered whether the pipe mightbe having “startup hiccups.”

But a Calgary-based producer said everything seemed to be OKwith Alliance. “At least gas is going into the pipe and it’s notcoming back,” he joked. At this point most traders are pricingAlliance flat to Aeco or just a little bit lower or higher, theproducer said. That could change, if Alliance develops a distinctpricing of its own, he added.

A California buyer said the hugely volatile border market wasmoving 50 cents at a time. He found it interesting that $17.25(non-Topock) and $19.25 (Topock) deals were done at the same time.”I bought non-Topock and sold Topock. As an end-user I don’t reallycare if the gas is at Topock or not. We can even get better flowsout of non-Topock [deliveries].” Topock deals often carry a premiumbecause it is a more liquid border point and people can trade it onEnronOnline, he said.

Some people were incredulous when some baseload border dealsduring bidweek fetched index premiums of a dollar or more. But as awestern source pointed out, with swing border prices handily morethan than four dollars above index at least through the first fourdays of December, “those people [buyers at premium] are getting arelative bargain so far, and they’re virtually assured of gettingtheir gas delivered while swing could get allocated.”

However, a large aggregator said soaring border numbers may notlast this week. He said there seemed to be few generators orutilities willing to buy at Friday’s levels, which in a few quotessurpassed $20. “And for good reason,” he added. “Why would theystep out and buy $20 gas for the weekend, when they can balance anyshortfall with pipeline gas and pay it back [this] week when priceshopefully will be down.” A possible indication that December swingprices might be coming off is January prices, which are at atwo-to-three-dollar discount, he said.

This relationship is somewhat of a Catch-22, the aggregatorcontinued. High December prices should prompt end-users to pullfrom storage rather than buy in the spot market, and this in turnwill cause December prices to fall back in line with Januaryvalues, he said. However, the relationship will once again getthrown out of whack when SoCal Gas storage gets below 40 Bcf, whichwill trigger the daily balancing rule. Then it will be time to payup again, he said.

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