This week’s price rally, for which virtually no one could discern any reasonable justification, was over Wednesday everywhere except in California. Most points retreated anywhere from about a dime to a quarter, with greater losses in the Rockies but only small ones in the cooling Pacific Northwest.

The California market pattern somewhat resembled the one of the previous day: substantial gains at the southern border and PG&E citygate, but a Malin drop of nearly a dollar and a half that was easily the day’s largest. Although as of Daily GPI’s deadline the California Independent System Operator had not issued a new Stage Two Electrical Emergency as it did on Tuesday, power generation demand was still strong in the warm Golden State, sources said. Border-SoCalGas quotes averaged slightly more than $15, reflecting accurate convergence with May prices.

“There’s just too much gas around,” a Gulf Coast marketer said of the general downturn. “I’m glad, too, because prices should be going even lower than this.” A Northeast trader sounded much the same theme. “It’s kind of like reality is setting in again,” he said. “There really wasn’t any reason for prices to have gone up Monday or Tuesday. Sure, there was a bit of weather here and there, but it didn’t add up to enough additional gas load for prices to have risen.”

Another sign of market weakness was that Sonat, Texas Eastern and Tennessee have been among pipes complaining to shippers this week of high-linepack problems resulting from excessive positive imbalances. Sonat estimated this month’s cumulative system cash-out imbalance at more than 1 Bcf long as of Monday. The situation got bad enough for Tennessee that a systemwide OFO Balancing Alert takes effect today (see Transportation Notes).

Although Kern River and other Rockies pipes had not quite returned to the $4.10s where they were trading prior to the big Opal Plant outage and Kern River maintenenance earlier this week, they were getting close again Wednesday in the $4.20s.

AGA said 43 Bcf of working gas (plus another 3 Bcf of base gas in the Producing Region) was put into storage last week. An Oklahoma source said the volume was “just right in there” with previous expectations but could be considered slightly bearish. Nymex traders tended to agree, sending the May contract just slightly lower after AGA’s report from where it had been priced during the morning.

Although it appears certain that California indexes will be going up for May as the state’s ominous summer cooling season approaches, the Gulf Coast and possibly other eastern markets look like they may be down a little, a marketer said. Another trader said just about all the Midcontinent and Southwest pipes are trading index-minus for May. The Southern California border, which has seen bidweek deals at the GPI index plus a dollar or more at times in recent months, is not getting the same treatment this time, he said, adding, “We sold the Cal border as low as index plus 5 cents today.” Buyers in the California market are resisting index premiums this month, he said. “They’re more willing to pay fixed prices and take their chances.”

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