Producers must have thought the Grinch was stealing Christmasearly when they saw the abyss-like depths to which December swingprices were sinking Monday. “I’ve never seen it [the spot market]dump so hard in my life!” exclaimed a Midcontinent trader.

Many points were 20-30 cents or more below last-of-Novemberlevels, which had taken steep dives on the day before Thanksgiving.Even more astonishing was the contrast with December index levels.Almost across the board, swing gas was going for 50 cents or soless than what baseload was fetching during bidweek. “What we saw[Monday] was outright panic selling,” according to a Houstonsource.

You’re going to find swing ranges all over the place, a marketertold Daily GPI, but there’s no mystery about the market’s earlyDecember collapse. “Just stick your head outside the window.”Indeed, sources in geographically diverse areas were in solidaccord about how “gorgeous” their local weather was. It may bearound freezing in Calgary, said a marketer there, “but that’s mildfor this time of year.” Intra-Alberta prices fell to as low as themid C$2.20s due at least in part, she said, to Aeco storage seeingnet injections for a little over half of last week.

A Southern California buyer who picked up border gas at an even$2.00, more than a quarter under his bidweek average, said he willstay in the day market for a while because he doesn’t expectcurrent low price levels to be sustained all through the month.

A Northeast trader agreed that prices are bound to reboundeventually this month, “but personally I see a lot more downside inthe first half of December than can be made up with upside in thesecond half.”

However, a marketer doesn’t think incremental prices will begoing any lower today. Nomination deadlines forced people to puttheir gas up for grabs and things just got ugly Monday, he said.But deals for the 1st-only are sometimes artificially low “becauseas the days go by, people kind of figure out what they’re going todo with their gas and what their options are.”

While not falling quite as drastically as the incrementalmarket, December baseload prices were also weak as bidweek came toa close. “Whoever waited until today [Monday] to sell theirDecember gas is in a lot of trouble,” a marketer said. “Things justtanked across the board.”

More than one end-user was regretting doing mostly indexedpurchases and not waiting until Monday to buy at fixed prices. “Toobad,” lamented an East Coast power generator, “I would have reallyhit the jackpot.”

©Copyright 1998 Intelligence Press Inc. All rights reserved. Thepreceding news report may not be republished or redistributed, inwhole or in part, in any form, without prior written consent ofIntelligence Press, Inc.