The slippery slope on which cash prices started sliding earlierthis week got steeper Thursday. As on Wednesday, the softness wasbeing felt in both the late-February incremental and March bidweekmarkets.

March ranges were stretched further-some approaching 20 cents orso-as prices continued to sink by several more cents at virtuallyevery trading point. New quotes fell into the $1.40s in theRockies, into the mid $1.50s in the Midcontinent and into the high$1.50s in the Gulf Coast. Things are “looking pretty rough” whensome utilities abandon their normal purchasing roles and are outselling baseload gas for March, a Houston producer commented.

In one marketer’s view, producers are paying for prices beingtoo high during January and February. Recall early December whenprices dropped briefly to not much over a dollar; he said; therewas a market overcorrection from that low point, and now are-correction back down is under way.

At least the market is rewarding suppliers who made their salesearly, according to one source.

Another trader said the net effect of what he considered abullish storage report (97 Bcf in withdrawals) apparently was”nil.” Between the AGA report and the short positions of many Nymextraders, he was anticipating a late rebound similar to one in theFebruary bidweek, “but that never happened.”

A buyer at the Southern California border whose only fixed-pricedeal was at $1.685, said he is using the GPI index for the rest ofhis gas and was able to pick up some as low as index minus 2.5. Heexpects to be selling some gas back during March if prices turnupward again.

A Western trader believes there is a downside of at leastanother 5-10 cents in the March aftermarket. With storagewithdrawal requirements becoming more urgent for many end-users,high-linepack problems will become more of an issue and theresultant OFO penalties will increase negative pressure on prices,he said. CIG has already put out a warning notice about this, thetrader noted.

As February day trading became more and more an afterthought tothe bidweek process, incremental price drops ranged from as littleas a penny to as much as a dime or so. Most were clustered in therange of 4-8 cents down. As usual, unseasonably mild weather inmost regions and a growing urgency to draw down storage accountswere cited as the primary reasons for a mostly flat February’slast-week price weakness.

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