The usual softness that accompanies a lower-demand weekendperiod arrived on schedule Friday. Price movement ranged from flatat some Rockies points to down as much as a dime in the Gulf Coast.Once more, mild weather along the East Coast caused Northeastcitygates to register the biggest declines of 15 cents or more,with Transco’s Zone 6-NYC pool again topping the list with a fallof about 30 cents. The Zone 6 slide into the mid $2.30s left ittrading little more than 20 cents above the production area’sTransco Station 65.

Cash was weak Friday but not as weak as it could have been,according to a Houston-based trader. The lows of a week earlier haddipped into the $1.80s and $1.90s on several pipes, he noted. Thereason why this failed to recur in most cases, he feels, is thattraders anticipated the decline by selling short into the pipesWednesday and Thursday and making up their imbalances with paybackgas for the pipes over the weekend.

“The screen gave everybody an early head-fake, looking like itmight go higher, but then came back down” to an eventual loss ofjust over 6 cents, a marketer said. He didn’t think futures hadmuch influence on cash anyway. “We saw good buying at first, butthen it petered out” after mid-morning, he said.

The big surprise for many western traders was no weekend OFO bySoCal Gas, a marketer said. He said he would have liked theopportunity to take the cheaper gas that results from an OFO intostorage “because we’re among the few that still have some injectionspace left.” Nobody expected a PG&E OFO because the utility wasprojecting below-target linepack for the weekend, he added.

The PG&E situation likely was behind Malin’s rare increaseof about a nickel Friday. In turn, the low-linepack projectionsprobably were related to PG&E’s reporting that both Units 1 and2 at its Diablo Canyon nuclear plant were at 50% power Friday andcontinuing to ramp lower due to heavy ocean swells. The plant islocated on the Pacific coast near Avila Beach, CA. No estimate wasavailable for when the units, each with capacity of 1,100megawatts, would return to full power.

CIG non-DJ Basin prices were running almost a dime lower thanthose on Kern River and Northwest because of a CIG OFO that wasextended through the weekend (see Transportation Notes).

One marketer said December basis continued to get weaker,pegging Chicago citygates at plus 5-5.5, considerably lower thanthe plus 15 reports around the same time a year ago. However,another trader said forecasts of colder weather this week hadcaused general Rockies basis to tighten about a nickel to minus 19Friday. A third source reported basis of plus 6 for the SouthernCalifornia border and minus 22 for San Juan-Blanco.

In spite of the weakness of the near-term market outlook, no onewas expecting a collapse anywhere near the one that caused GulfCoast prices to sink more than a dollar below indexes to less than$1 in the first week of December 1998.

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