Afternoon

Nearly all points continued to slide a few more cents Thursday,but afternoon rallies by three key April futures contracts (naturalgas, crude oil and heating oil) had many traders believing thatwould spark a rebound in the gas market today.

Destin Pipeline canceled Friday morning a force majeure that hadbeen issued on the previous afternoon due to a temporary shutdownof the BP Amoco Pascagoula (MS) Processing Plant. Destin had askedplatform operators to reduce production to 25% of scheduledquantities until the plant came back on-line.

Although yesterday afternoon was filled with bearish weather andfutures market news, an early morning futures screen rally combinedwith large price jumps in the Northeast to lead most points on thesurvey to increases of a few cents to more than a nickel.

Texas Eastern reinstated until further notice Monday afternoon anOFO requiring that all deliveries in its M-3 market zone be made at auniform hourly rate. As in last Friday’s OFO that was suspendedSaturday morning (see Daily GPI,Jan. 18), non-compliance penalties are $25/dth and all M-3Operational Balancing Agreements are suspended for the purposes ofhourly allocations only.

After being hit with a devastating combination of bearish newsFriday afternoon and Monday morning, traders at the New YorkMercantile Exchange had little choice when the market reopened. TheJuly contract took it on the chin, gapping lower on the open beforeposting a 7.1-cent decline to finish at $2.237. The August contractdid not fare any better, slipping 6.9 cents to $2.268. Estimatedvolume was solid with 78,116 contracts changing hands.

Multiple fires were reported last Tuesday afternoon in BattleCreek, MI, as an “incident” at Semco’s Battle Creek gas systemresulted in two destroyed homes and extensive residential damage.Two people were treated at the scene for smoke inhalation, Semcosaid. One report said the incident occurred when a high-pressureline was mistakenly connected to a low-pressure residential line.

Questar is cutting about 25,000 Dth/d while repairing mechanicalproblems that began Tuesday afternoon on its No. 3 compressor atFidlar Station.

For the second trading session in a row, early selling pressurewas reversed in afternoon trading allowing the market to close nearits daily high. The July contract notched a $2.325 low both Fridayand Monday, but settled back up above $2.37 both days. Evenestimated volume figures were similar with yesterday’s 43,630falling just short of Friday’s 45,070 mark.

May prices remained firm in morning business Thursday but weregetting softer in the afternoon after the June futures screenstarted retreating from a dalliance around the $2.40 level, a GulfCoast producer reported. However, a marketer saw little movementeither way for May numbers in western markets. And another tradersaid intra-Alberta prices “are getting wild,” reporting themstraddling the C$2.80 level Thursday.