While nearly all the production-area points held steady withchanges of no more than a penny or two in both directions, it wasdelivered prices in the Northeast, Midwest and California that gavethe cash market a taste of volatility Thursday. Northeast citygatesrepeated as the day’s big losers with declines from about 35-38cents (Transco Zone 6-NYC and Texas Eastern M-3) to more than 50cents (Iroquois Zone 2 and Algonquin citygate) as the regionexperiences a very slow warming trend from its early-week chill.Ranges were very large as prices fell steadily while tradingproceeded, one source said.

PG&E citygates again recorded California’s biggest drop(more than a dime) as the utility issued a high-linepack OFO fortoday (see Transportation Notes). The Southern California borderfell by only half as much both because there was no correspondingOFO by SoCal Gas and because PG&E’s OFO notice came outrelatively late in the morning after most border trading had beencompleted, according to a western marketer. Discussing the postingdelay, he said, “That can mean a lot of money to a trader if youfind out even five minutes later than others about an OFO.”

Meanwhile, a cold front moving southward and eastward into theMidwest had Michigan and Chicago citygates rising modestly by 3-4cents. A buyer said some people were trying to use the Januaryscreen’s strength to boost Midwest prices even higher, “but it’snot working for us.”

Noting the flatness at Midcontinent field points, a marketerthere said, “We’re still waiting for weather.”

Despite the sizeable price drop at Transco Zone 6-NYC and sub-$3quotes starting to surface again, the point was still averaging alittle over $3. That prompted a trader to complain, “I still don’tknow why this New York City gas is so high. It came down some moretoday but is still way above index, while other Northeast pointsare getting back around index by now.”

Perhaps reflecting anticipation of lower prices later thismonth, one source reported doing a baseload Algonquin citygate dealat $2.71 while his swing trades for today-only flow were in the mid$2.80s.

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