The weekend market was divided along geographical lines Friday.Price increases tended to range from about a nickel to a littlemore than a dime at eastern points, but high-linepack OFOs by themajor California distributors (see Tranportation Notes) served tokeep western numbers flat to down more than 30 cents at thePG&E citygate.

It seemed like California was holding an “OFOsapalooza”festival, complained one aggregator. All three California deliverypoints softened, and the effect was also felt strongly in San JuanBasin, he said. However, he and other traders reported moderaterebounds in late trading. A lot of people anticipated the OFOs andthus waited on their announcements before making purchases, onesaid, so that helped late numbers to climb a little higher. Inaddition, California weather was starting to warm up again andcreated some air conditioning load, he said.

Flat to slightly higher Permian and Waha prices managed toescape the West’s general softness largely due to “decent” coolingdemand from Texas utilities, said a marketer reporting much largerthan usual Waha volumes. Another trader said he was unable to doany Agua Dulce deals because HPL had claimed its maximum capacityon Channel in response to electric utilities ramping up theirpurchases, leaving precious little space for anyone else.

Intra-Alberta was a rare western market experiencing a rise ofabout C5 cents. Many Canadian traders will be able to take offMemorial Day along with the U.S. because Nymex will be closed, saida Calgary source. However, her company traded only through Mondayin the intra-Alberta market but through Tuesday at all otherpoints.

“There is essentially no weather demand here in the Northeast,”said a utility buyer, “so our rising prices must be almost entirelydue to a rising screen.” In its expiration day, June futures tackedon another 17 cents to wind up at $4.406.

Bidweek continued to make early predictions of most businessgetting done before the holiday weekend ring hollow. Sources tendedto blame the reluctance of gas buyers to commit on deals to”sticker shock” over the super-high levels prices are reaching. Butone Chicago citygate buyer reported making “three to four calls[Friday] to find gas in the field with no luck. Everyone is headedto the beach. It’s been a tough week.”

A couple of large marketers were in agreement that the Junemarket was very quiet and illiquid after the Nymex settlementFriday. At that point hardly anybody was willing to take on newprice risk over the long holiday weekend, they said. A thirdmarketer said the LDCs “are in complete shock. Their mentality nowis not to buy during bidweek at high prices, but to wait until apeak day and then buy at ‘very high’ prices.”

The spectacular gains realized by futures from Wednesday throughFriday were creating tremendous ranges in both fixed prices andbasis. For instance, reports of San Juan-Blanco trading in the mid$3.50s Wednesday yielded to quotes in the low $3.90s Friday. Onetrader saw Kingsgate go from $3.60 in his first deal to the low$3.80s Friday, while another quoted an El Paso-Permian range of$3.85-4.10.

Similarly, basis ranges were getting stretched out of shape,sources said. One who had been doing Southern California deals atplus 40 Wednesday morning said basis there had shrunk to plus 15Friday. A marketer said his Sumas basis had spread from minus 36initially to minus 70.

Another marketer said he got a sizeable reduction in his Junevolumes when two large end-users called Friday morning to tell himthey were switching to alternative fuels. “With prices so high andstill on the rise, people are really looking for alternatives,” hesaid.

However, a Gulf Coast producer had little sympathy. “End-usersare telling me that at these prices they’ll be out of business inthree months,” he said. “Well, I’m a producer and had to deal with$1.20 pricing several years ago, and I’m still here. They[end-users] will make it through this.”

Look at crude oil, the producer went on. “It went from $12 to$30 and the government stepped in to say that prices were too highand that consumers would suffer for it. I say they’ll suffer morewithout heat.”

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