What had seemed like a mildly softer early aftermarket in swingdeals done Tuesday got much weaker Wednesday. Influenced greatly bya falling screen but also by a continuing lack of positivefundamentals, nearly all points were down a dime or more. NorthernCalifornia was a rare bastion of relative market strength in theU.S. Malin and the PG&E citygate dropped only about a nickel asPG&E repeated last week’s unusual action of issuing alow-inventory OFO on a summer weekday.

Prospects of price recovery before the Labor Day weekend lookeddicey. There are plenty of sellers but not that many buyers,sources said. In addition, AGA’s afternoon report of 69 Bcf instorage injections last week exceeded most expectations and was”undeniably bearish,” a Midcontinent trader said. He figured thelarge injection figure could be partially explained by theincentive provided by end-of-month cash-out prices. In many casesit made sense to short the pipeline by selling gas or putting itinto storage at the prevailing market price-around $2.80-and getcharged at the cash-out level, which is often based on first-ofmonth indexes, he said. Since August indexes were mostly in the$2.50s, that made for a nice price play, he concluded.

Wednesday’s weakness reflected the reality of current oversupplyin the cash market, a Gulf Coast marketer said. A number ofsuppliers held off selling Tuesday in hopes of higher pricesWednesday, he went on, but when it became obvious that would not bethe case, they created a double-selling effect in being forced tooffer imbalance supplies as well as current production.

The only gas-pertinent storm news was that a tropical wave hadformed over Mexico’s Yucatan Peninsula.

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