With little to no change in fundamental conditions and energy futures continuing to point downward, the cash market saw no reason to vary Wednesday from Tuesday’s precedent of mostly moderate declines. General price movement was more homogenized across regions yesterday, as drops of about a nickel to 20 cents or so characterized the softening for all but a few points.

Sumas and Malin fell about a quarter and a little over 30 cents respectively. Also, intra-Alberta numbers were down about C30 cents, a marketer said. The northwestern quadrant of the U.S. and Western Canada have a virtual monopoly on cold weather currently, but it isn’t enough to keep regional prices from sliding, he said.

It appears that traders are hunkering down for a sustained period of price weakness. A producer making Chicago citygate sales in the mid $1.90s commented, “It’s just too warm there for much [gas] load.” Temperatures will be cooling off a bit today and Friday, he said, but will remain relatively mild for December. The National Weather Service’s latest six-to-10-day forecast will fan no bullish flames, either, he noted. It calls for above normal temperatures next week for the entire U.S. east of a line running from South Dakota through West Texas.

A month into the traditional withdrawal season, AGA finally got around to reporting the first net reduction of storage inventories — 16 Bcf. As it turned out, the Consuming Region West was doing all the withdrawing of 19 Bcf, while the Consuming Region Eastern saw no change and the Producing Region was stashing away another 3 Bcf. Cash traders are expected to greet the news with a collective yawn today, since the figure fell within the range of most expectations but failed to keep the year-on-year surplus from growing larger.

In addition to the lack of weather demand, a further depressant on prices will be mandatory “ratchets” on storage withdrawals kicking in this month, a Houston-based trader said. “It’s not an economic decision, even if you’re withdrawing gas that might have cost up to $4 last summer at a time when current spot is less than $2.” Customers will have no choice because many facilities require them to cycle in and out each year on a graduated schedule, which means they will have to be down to a certain inventory level by the end of December, the trader said.

One positive sign for prices, albeit small, was Transco being able to lift its first-ever OFO Friday (see Transportation Notes). Bur prior to that, Transco had to ask some offshore producers to shut in briefly over the weekend to allow the pipeline to manage its excess linepack, a marketer said. Producers can manage outages of three to four hours without wells suffering, he said; in fact, those kinds of short shut-ins are common for maintenance work. “It’s the several-day outages that can really hurt a field.”

A Calgary-based producer said if there is still no weather demand in sight by Dec. 15, many traders may be ready to write off winter as a lost cause. Then, he added, their big concern will be, “What are we going to do with all this cheap gas?”

Although the transition into an Enron-absent December aftermarket generally has not caused any serious problems, a Gulf Coast marketer reported that his staff spent about 12 hours fixing nominations Saturday. It was the schedulers suffering most of the headaches rather than traders, though, he said. Luckily the Gulf pipes were mostly long on supply, so that helped mitigate non-performance hassles, the marketer added.

EnronOnline continues to fade from market attention as competing platforms take up the slack (see related story). Several NGI sources said they no longer even bothered to look at EOL to see if anything worthwhile was on its screen. “There are fewer and fewer postings every day,” one trader said. A couple of others reported seeing a few Henry Hub-related swaps and “physical for a lot of Gulf Coast points based on January indexes” Wednesday on EOL.

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