This week’s price rally ran out of steam Thursday with nearly all points declining in double digits. Traders anticipated a moderation of the blast of winter that had invaded most of the nation except for the Southeast and Mid-Atlantic states, and also noted considerable weakness in the natural gas, crude oil and heating oil futures contracts.

The downhill slope is likely to get much more slippery today, several sources said. The typical demand drop over a weekend will combine with warming weather trends to create price weakness that could rival that of the Wednesday preceding the long Thanksgiving holiday period, they said. Henry Hub was already trading for the weekend in the $1.50s Thursday afternoon, representing a huge drop from the morning’s average in the high $2.10s, a marketer said.

Flatness at Sumas made it a rare point in resisting the overall downturn. A winter storm from the Pacific Northwest into the Rockies helped generate demand on Northwest, but Sumas tended to get more price support due to a warning from the pipeline against drafting linepack north of the Kemmerer (WY) Station bottleneck.

Price movement was somewhat erratic. Chicago citygates began the morning down about 18 cents around $2.30, fell to the mid $2.20s, rebounded to the low $2.40s and wound up at $2.34-36, which is about where the day averaged, a Texas trader said.

Transco notched a little bit of corporate history by issuing its very first OFO ever due to excessive linepack (see Transportation Notes). “I’ve had better days,” sighed a Gulf Coast producer about the OFO. “Almost every pipe is under a similar deal as Transco, it’s just that they have taken it one step further. Tennessee, Sonat, Texas Eastern, NGPL, Trunkline…they are all so stuffed with gas that they’re warning their customers about possible OFOs.

“Transco is trying to cut [excess] production. If you don’t stay in balance, they will dish out the fines. There won’t be anyone trying to play the cash-out game, it will be way too risky. Their tolerances are low and their fines are high. It’s just gas in and gas out. You have to make sure the pools are right and your suppliers are giving what they say they’re giving.”

EnronOnline was back up and running Thursday, but just barely (see related story). There was next to nothing in physical gas to be found, said one trader, although another reported Nymex-related swing swaps and paper basis for Henry Hub being posted in the afternoon. One major marketer didn’t care anyway. “EOL is a non-event for us now. I didn’t even turn it on today,” he said.

Today marks the official end of the 2001 Atlantic hurricane season – one of the most benign in spot market memory for Gulf of Mexico production.

This has been a “completely crazy” bidweek because of the Enron and storage situations, an eastern utility trader said. Chicago has ranged all the way from $2.20 to $2.85, he added, although most deals seemed to be centered in the $2.40s.

A marketer reported having some Enron-related deals being retraded Thursday, but said the volumes involved weren’t large. Another source said he saw no reason to change anything on his deals with Enron. However, both admitted to some uncertainty about how smoothly Dec. 1 flows will go.

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