Cash prices continued to act like rampaging bulls as Octoberbegan Thursday. Double-digit increases of between 10 and 20 centswere the order of the day almost across the board as traders notedchilly weather in major northern market areas and the fact thatGulf of Mexico production, while nearly back to normal afterhurricane outages, still was missing a few hundred MMcf/d. At leasttwo big processing plants in southeast Louisiana remained shut downdue to storm damage. Cash also built on Wednesday’s big screenrun-up and initially higher futures prices Thursday. Even theNovember contract eventually wound up with a small loss, a traderpointed out.

However, a Texas producer sensed that the early October firmnesswas already peaking. Carthage prices soared about 20 cents to the$2.30 area, but had fallen about a dime in intraday tradingThursday afternoon for today’s flow, she said. The producer heardthat a major electric utility had badly underestimated its gasrequirements and was causing East Texas prices to soar Thursdaywith heavy purchases.

One source thought the California border-PG&E citygatespread “has gotten to the ridiculous stage.” Noting the two pointswere separated by about 23 cents Thursday, he said that equals themaximum IT rate plus variable costs for the Baja on-system path.The ridiculous aspect is “that path only fills in January andFebruary,” he complained.

A marketer perceives the San Juan Basin market as “very shortright now. I had four voice mails waiting this [Thursday] morningfrom people looking to take first cracks at my length, and theyknow what time I get into the office.” It’s not that a lot ofpeople are short, but the ones that are are big ones, he added.

It appears that the intra-Alberta price “madness” is beginningto subside, a Calgary trader said. Numbers that had been in theC$2.50s were down about a dime Thursday, he said. Some people thinkAlberta’s big surge in the October index and recent day trading wasin reaction to a NOVA meeting where they reconfirmed the dates andvolumes for the eastern expansions of Northern Border andTransCanada, he said. Nothing new was learned at the meeting, thetrader went on, but it reopened the subject of there possibly notbeing enough gas to go around. That aroused a fear factor in someattendees along the lines of “the time is getting closer,” heconcluded.

©Copyright 1998 Intelligence Press Inc. All rights reserved. Thepreceding news report may not be republished or redistributed, inwhole or in part, in any form, without prior written consent ofIntelligence Press,Inc.