As anticipated after Wednesday’s dollar-plus screen plunge, cashprices also were falling bigtime Thursday. Exceptions to declinesof 50 cents or more were rare. However, some sources detected signsthat the huge erosion of cash numbers that started late last weekmight be near an end.

Not only did a screen uptick of a little more than 20 cents givebulls some encouragement, but weather a bit colder than many hadexpected is returning in several regions. One trader reported”pretty good” intraday demand in Texas, saying that freezingtemperatures were due overnight in the northern part of the state.The Midwest also was getting chillier as a new front moved into thearea. “For those reasons I expect prices [today] to range from flatto not much more than moderately softer,” a marketer said. Much ofthe market’s weakness got worked out Thursday, he added.

A Midcontinent trader saw more cause for thinking prices mightbe at or near their lowest levels for the time being. With spot gasquotes having come down so much recently while liquids pricesstayed fairly steady, he expects many producers are rethinkingprevious decisions to bypass processing in order to have supplieswith a higher Btu content. “That ought to put some kind of a floorunder prices as a lot of richer gas leaves the market,” the tradersaid.

Despite the hints of a market flattening out, Thursday’s priceswere falling in both eastern and western markets as tradingproceeded. A marketer who traded Malin as low as $8.35 said themarket fell further afterward to the $8.00 area.

A western trader noted that San Juan and Permian prices wereabout flat to each other, “and it has been that way for a couple ofdays. This doesn’t happen too often. The reason [for near parity]is that the San Juan is flowing about the same as the Permian,”which is to say that supply availability from both basins is aboutequally deficient.

Southern California border numbers likely will get some support forthe weekend as SoCal Gas confirmed it will begin 70% daily balancingSunday following the end of the current five-day period (Jan16-20). The LDC went to 50% weekly balancing fairly early in thecurrent heating season (see Daily GPI, Nov. 21, 2000). That meant at least half ofborder deliveries must be covered by physical flowing gas or firmstorage over each of the five days. Now that SoCal storage has fallenbelow 40 Bcf, the physical/firm storage requirement is rising to 70%on a daily basis.

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