It was only Thursday that a marketer told NGI, “I have no doubt we’ll be seeing dollar gas in some markets before the year ends” (see Daily GPI, Sept. 21). Just one day later, his prediction was already coming true as a few Rockies points plunged on either side of 40 cents to register a number of quotes in double digits in Friday’s trading for the weekend.

Friday’s precipitous drop was confined to western numbers, as eastern prices continued the week’s earlier market pattern by falling less than a dime in most cases. In fact, price movement ranged from essentially flat to less than a nickel lower for Northeast and Midwest citygates and some Gulf Coast points. Sources said the relative firmness in those markets was largely due to a cold front that was expected to move through the Midwest and into the Northeast over the weekend, and formation of a tropical depression in the western Atlantic.

CIG, Cheyenne Hub and Questar tended to show the greatest weakness. But despite seeing a number of sub-dollar quotes, CIG and the Hub managed to average just above $1 for the day. The Questar average was in the 0.90s, as one marketer reported a deal as low as 75 cents. There were unconfirmed reports that some producers on the CIG system were starting to shut in wells.

It was the first time in nearly three years that the market has seen any sub-$1 pricing. Somewhat curiously, it was the Gulf Coast where quotes averaged in the $0.90s at a large number of Louisiana and Texas points (with some low-end numbers slipping into the high $0.80s) in trading for the weekend of Dec. 5-7, 1998 flows (see Daily GPI, Dec. 7, 1998). Some Gulf producers started to shut in gas at that point, citing the low prices as unusually mild weather for early winter dominated everywhere except along the West Coast.

The current market slump in the Rockies may not last beyond the weekend, however, as one western trader said several pipes were rallying late, after Kern River-Opal ran back up as high as the low $1.20s. He thought the usual falloff in weekend demand was primarily responsible for the price drops below a dollar, and that the rebound occurred as bargain hunters began buying more gas for storage.

Tropical Depression Ten was still weak, but getting better organized, the National Weather Service said in a Friday afternoon update. Its center was about 435 miles south of Bermuda. The system was moving to the northwest, though; if that tracking is maintained, it would go ashore somewhere on the East Coast, well away from Gulf of Mexico production.

A Midwest marketer said he avoided any swing deals Friday in an attempt “to get a handle on October business, which is looking pretty weak at this point.” Futures may be falling, “but I think basis will find a way to strengthen up the October market a bit,” he added. The marketer was hearing relatively soft physical basis of plus 5 cents for Consumers Energy and plus 2-3 cents for MichCon, but said TCO was hanging in pretty tough at plus 14-14.5 cents.

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