While the shock of the probable demise of Enron monopolized conversation in all trading rooms (see related story), swing prices continued to shoot higher Wednesday as winter storms raged through much of the nation’s midsection and parts of the West. Cold temperatures were prevalent almost everywhere except in the Southeast and Mid-Atlantic states.

Nearly all of the gains were around 20 cents or more, with several points rising by about half a dollar and both of Transco’s Zone 6 pools topping the pack with upticks in the vicinity of 70 cents. Peak quotes exceeded $3 at Transco Zone 6 and the PG&E citygate.

This week’s price rally wasn’t expected to last much longer. “We’ll have one more day of really cold weather and then be back up to the 60s for the weekend,” a source in the Midwest said. Even more telling about prospects for an imminent downturn, however, was AGA’s report that a net 12 Bcf had been injected into storage last week despite a 4 Bcf reduction in Consuming Region East inventories. Storage now stands at a record high of 3,144 Bcf. The screen, which had previously fluctuated to both sides of flat, subsequently swooned for a dive of nearly 30 cents.

“Here we are nearly a month into the traditional withdrawal season and yet we’re still injecting gas,” marveled an aggregator. The Producing Region’s 13 Bcf injection was chiefly responsible for widening the year-on-year surplus to 642 Bcf, he noted.

An astounded trading community pondered how to adjust after the EnronOnline trading platform was shut down abruptly Wednesday morning. The action followed news that Standard & Poor’s had downgraded Enron’s credit rating to junk bond status (it was later joined by similar proclamations from Moody’s and Fitch), Dynegy Inc. had pulled the plug on its proposed acquisition of Enron, and trading in the embattled company’s stock had been halted temporarily by the New York Stock Exchange after the share price plummeted to little more than a dollar. The stock eventually wound up at an all-time closing low of 61 cents.

“I don’t expect it [EOL] to come back up again,” a Midcontinent marketer said, adding that he considers an Enron bankruptcy filing a near certainty. “After all, who’s going to trade with them now?”

The marketer noted that rival platform IntercontinentalExchange had a bid-ask range of $2.32-35 for December Waha baseload that morning, while EOL was offering the same point a dime higher at $2.42-45. “It seemed like you could buy ICE and sell EOL for a nice 7-cent profit, but nobody is willing to take a chance on selling gas to Enron.” Some people are continuing to buy gas from Enron, but they still have to worry about whether the supply contract will be fulfilled, he said.

Another trader reported that EOL numbers for NGPL-Louisiana were 18 cents above those on ICE.

How the likely removal of Enron from the market will affect overall trading is unclear at this time, one source said, “but I’m pretty sure things are going to be messy for a while.”

Other traders had similar reactions. “It’s not a good thing, but nobody knows the ramifications at this point,” one said. “For a lot of traders it will be back to the good old days, when if you knew how to use a rolodex you were in good shape. The companies that have maintained relations on the phone instead of relying mainly on EOL will be king for a while.” ICE [IntercontinentalExchange] will pick up some of the slack left by the absence of EOL, and Altrade also should benefit, he said.

A western marketer commented that without Enron and EOL, “it definitely will increase volatility largely by decreasing liquidity in the cash market. We’re already seeing that happening” with the diminution of EOL activity in recent weeks. This bidweek has been more low-key than most, the marketer said, partly because of the Enron problem, but also because it’s the last month of the year and storage is at record levels.

Another source cautioned, “Don’t hang everything happening in this market on Enron. It’s closing day on Nymex, there’s a blizzard in the Midwest, and we get another report of storage injections when we should expect storage to be going down.”

December prices were “basically flat from yesterday,” said one trader late in the morning. However, according to another source, bidweek activity nearly ground to a halt as the flurry of Enron developments continued to flood the newswires.

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