With signs that the touch of winter experienced earlier thisweek in the Northeast was already starting to subside, nearly allof the cash market ranged from flat to about a dime lowerWednesday. Most production area and Midwest citygate points fell bya nickel or less. The declines of a dime or more tended to clusterin the Northeast.

The day’s biggest drop of nearly 60 cents occurred at TranscoZone 6-NYC, prompting one Northeast buyer to comment, “It lookslike the New York City madness is coming to an end” followingTuesday’s spectacular spike over $4. Zone 6-NYC was still themarket’s price leader in the $3.40s Wednesday. A Houston-basedmarketer complained there was not much spread opportunity forgetting deals done, but “it sure would have helped to have FT intoTransco Zone 6.”

Contrary to reports Wednesday, gas is not expected to flow throughthe new Maritimes & Northeast Pipeline until later this month whenSable Island wells are brought on line. Production is expected to rampup from two wells to be connected in December to 450 MMcf/d bymid-January, according to a spokesman for the Sable Offshore EnergyGroup (See separate report, this issue).

Chicago wound up among the flat points but showed somevolatility by starting higher at $2.22, falling to $2.14 and thenrallying to $2.17-18, one trader said. Shippers underutilizingtransport capacity from the field to the citygate were about theonly things propping up the Chicago market, she added, especiallysince LDCs (NI-Gas in particular) were net sellers of gas in thefield.

There were ample sellers in the physical market, many of themlong on storage supplies, a Gulf Coast marketer said. “What theyare trying to do now is beat first-of-month index prices with theirsales, and that effectively put a lid on any market upside.”

Even though PG&E did not issue an OFO, citygate prices wereweakened a bit by the utility’s projection of above-target linepackfor today, a large aggregator said. The PG&E citygate drop ofabout a nickel was the largest among California points.

AGA’s report of 5 Bcf in storage injections last week had to beconsidered bearish since the industry is already a month into thetraditional withdrawal period, a marketer said. “I don’t expect acrash like last year’s [when Gulf Coast pipes plunged to less thana dollar in the first week of December 1998], but this market doeslook due for more softening.”

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