The U.S. was getting colder Thursday, but that fact gave nosupport to cash prices, which mostly fell between a nickel and 15cents. A futures drop of less than a penny was too small to matter,sources said, but the second straight report of storage injections,combined with forecasts of warmer weather next week and a drop inJanuary crude oil futures to less than $11/barrel, was too much fortraders to ignore.

There was considerable price divergence at the Chicago citygate,said a marketer reporting Peoples Gas Light & Coke deliveriesat $1.80-85 while Northern Illinois Gas numbers were in the low$1.70s. Peoples called a Critical Day starting today and runningthrough the weekend, so those with firm transport to Peoplesdelivery points were able to charge a premium, he said. Last week’sCritical Day notice by Peoples had ended Monday, the marketeradded, and until Thursday of this week citygates for the two LDCswere approximately equal.

El Paso’s continuing Unauthorized Overpull Penalty, which entersits sixth day today, doesn’t mean much to prices when demand isthis weak, said a California buyer. She quoted Southern Californiaborder numbers down about a dime to either side of $2.00 and hadreceived an offer of $1.95 gas for the weekend.

Many traders were anticipating still softer weekend pricing in avariety of markets, although nobody expected another plunge tosub-dollar levels in the Gulf Coast similar to last Friday’s. “Ithink we give up 20 cents [today],” said a Midcontinent marketer,”and I think we’ll be lucky to have $1.35-area pricing for thebalance of the month. If you look at the weather and storagesituation, people need to be 10-20 degrees colder just for tradersto get rid of the gas they bought baseload, and the fact is it[will be] getting warmer instead of colder.”

Another source tended to agree, predicting traders will beinjecting into storage over the weekend “because there’s nowhere totake the gas.”

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