As sources had predicted, mild softness dominated Thursday’s cash market. Some points were flat, and a large majority registered declines of about a nickel or less. Only a few scattered points saw drops of about a dime or more, and several of those were associated with the Chicago market.

Chicago citygate quotes fell about 15 cents in volatile trading, and one marketer thought the decline likely reflected a pickup in storage use by area utilities and end-users. The fall took the citygate average below its December index of $2.42 for the first time since Dec. 10 trading.

The fact that weather is trending chilly or colder in several areas such as California and the Southeast helped keep Thursday’s price drops fairly small, and a moderate screen rise chipped in too, said a Gulf Coast producer. He also suggested that the avoidance of a price rout may be partially due “to people still buying gas to cover supply positions that were lost with the Enron collapse.”

The producer said he was still having trouble understanding how traders seem to be ignoring the nearly 1 Tcf storage overhang. “But the other side is that gas keeps disappearing [into the market] each day. I’ve had no trouble placing mine.”

However, a Midcontinent marketer said he was unable to sell anything Thursday, adding, “That was how bad demand was. No gas at all.”

Opinion remained mixed on the direction of the holiday market. An aggregator observed, “We’ve got a five-day trading period coming up Friday and it’s going to be pretty cold for the last three of them, so I see a good chance of at least slightly higher weekend prices.” But a Gulf Coast producer managed to land on both sides of the question, saying he expected prices to be a few pennies up mainly because of the screen’s 7-cent gain Thursday, then adding, “No, wait; now I think there are going to be too many business closures and prices will soften.”

January business generally remained an afterthought for many traders of non-Canadian supplies. There were indexed deals being done, all at discounts, but not much else happening, said a producer. “Most of it will be done after the holidays.” A marketer said all his January trading will be done from next Wednesday on. “We won’t be in on Monday, and we’re not geared up for [today].”

A Gulf Coast trader looks for bidweek to be “a play between those that want to pull their storage out, they will go in short, and those that plan to hold on to their storage. They will be the ones buying most of the January baseload.”

Gulf South announced that in an on-line auction conducted Wednesday, Sempra Energy Trading and Prior Intrastate Corp. had submitted identical winning bids of $2.57/Dth for January baseload gas to be delivered out of the pipeline’s Bistineau Storage Facility in North Louisiana. Each company will receive 395,000 dekatherms. These prices will not be used in GPI’s bidweek survey, however, since they were struck prior to today’s official start of the survey period, which has always been the last five business days of the month since the publication’s inception.

A producer who reported doing only basis and index deals so far for next month offered these basis quotes: Texas Eastern-East LA minus 6.5 cents; NGPL-Texok minus 8 cents; TGT SL minus 2.5 cents; Transco Station 65 plus 3 cents; Texas Eastern-South TX minus 14.5 cents; Tennessee Zone 0 minus 14.5 cents; and ANR Southeast minus 8.5-9 cents.

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