The meltdown occurred as expected Thursday in the cash market.Few points escaped with declines of less than 20 cents, with thegreatest losses of around 40 cents at the linepack-saturatedNorthern California points of Malin and the PG&E citygate,where the utility declared a systemwide OFO for today (seeTransportation Notes).
Prospects for any rebound today are dim, traders agreed. There’snot much weather load anywhere except in the South, a Gulf Coastsource said, and the usual dropoff in weekend demand can beexpected.
“We got a bit of a scare around mid-morning when the screen, after starting out lower, suddenly ran up to $4.20 for a little while,” said a Midwestern marketer. He and other cash traders speculated that the brief spike was associated with Sonat’s bulletin board posting around the same time of news about a Wednesday evening offshore rupture that caused the shut-in of an estimated 50-100 MMcf/d until further notice (see related story this issue). However, apparently people decided “it wasn’t that big a deal” because July futures soon fell back into negative territory on the day, another marketer said.
It caught a lot of people’s eyes when August and Septemberfutures fell below $4, a Midcontinent trader said. “My companysnapped up about 25 contracts over both months real quickly.”
Once again the Southern California border did not fall nearly ashard as its Northern California counterparts. SoCal Gas againfailed to match PG&E’s OFO with one of its own.
Columbia-Appalachia (TCO) quotes in the $4.20s were running onlya few cents below some Northeast delivery points and surpassed acouple of them. TCO was allowing essentially no storage injectionsduring the July 1-4 period, so now shippers are buying heavily forstorage in a catch-up effort, one trader explained.
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