Last week’s yo-yo market pattern continued into the weekend asprices reversed direction once again Friday, falling between 15 and50 cents at nearly all points. California remained the contrarymarket with larger declines at the border and Malin and the day’srare uptick at the PG&E citygate.

A Northeast marketer thought that in addition to softness from atypical weekend demand slump, cash was pretty much following thescreen, which was more than a dime down during the morning, beforerecovering in the afternoon for an eventual drop of a little morethan a penny. It’s getting so you hardly know what to believe inthe weather forecasts any more, the marketer said. “Yesterday[Thursday] they said we had some weather coming, and today they sayno weather is coming. Take your pick.”

General market sentiment is pretty bearish right now, accordingto a Midcontinent source, “but I still think any time we get anyweather in the major populated areas, we’ll have prices risingagain.” However, the last two weeks of January are usuallyconsidered the coldest period of the year, he said, “and we’vegotten most of the way through them with mild temperatures.”

Although PG&E did not issue an OFO, the citygate wasFriday’s sole rising point partly because the utility wasprojecting linepack around the lower end of its target levels, amarketer said. He also noted that Cal-ISO went to a Stage ThreeElectrical Emergency again Friday due to the loss of 260 MW inNorthern California when a generating unit tripped off-line thatmorning. The unit was expected to return to service Fridayafternoon.

Bidweek was still a non-starter for the most part. But Northeastbasis was coming off hugely, said a regional trader. He reportedbasis for Texas Eastern M-3 at plus 110, Transco Zone 6 (NYC) atplus 220-240, TCO at plus 29-31, CNG (Dominion) at plus 49-50, andTransco Zone 6 (non-NYC) at plus 110-125.

The Zone 6 (NYC) basis is “way down” from plus 665 two weeksago, he said, noting that was a drop of more than 400. If colderweather doesn’t come along soon, the trader sees the possibility ofNew York City plunging further to variable transport costs from theGulf Coast of about 70 cents.

A western trader, quoting basis of minus 15 for San Juan Basinand minus 5 for Permian Basin, said he was waiting to be a sellerin the California market. “Our belief is that this market has moreupside potential than it does to the downside. The reason for thisis there is a definite possibility of going to 90% daily balancing[on the SoCal Gas system] in February.”

He was not the only one bullish about California. “I believethat California will lead the way to higher levels,” a marketersaid. “Nothing has substantially changed in the fundamental outlookin the West. Hydropower is low, storage is low and demand remainshigh.”

A buyer in California reported February fixed prices tradingaround $13.00, adding that March numbers are “south of $10.00, sothat gives us some encouragement.” A marketer outside the statesaid overall bidweek remained very quiet through Friday afternoon,”but a few people were ‘sniffing around’ for Cal border business.”He was hearing a border fixed price range of $13.00-20.

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