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Judging from the huge dip in futures prices last Wednesday, themarket apparently didn’t get wind of a new, more bullish hurricaneseason forecast by renowned hurricane prognosticator Dr. WilliamGray and his team of soothsayers at Colorado State University.

Judging from the huge dip in futures prices yesterday, themarket apparently didn’t get wind of a new, more bullish hurricaneseason forecast by renowned hurricane prognosticator Dr. WilliamGray and his team of soothsayers at Colorado State University.

After grousing that it didn’t think any changes to its existingpro-rata capacity allocation procedures were “necessary orappropriate,” El Paso Natural Gas reluctantly last week compliedwith FERC’s order and submitted a proposal for a new allocationscheme that would assign “pathed” rights for delivery of a portionof the primary firm gas volumes transported over its system to theCalifornia border.

The swing trading pattern immediately following Christmas didn’tseem very much different from the days preceding the holiday: agenerally softer market, with declines of up to a dime Monday atmost points, arrayed against conspicuously higher prices fordeliveries into the New York City area. One thing that did change,however, was generally flat numbers for the Rockies and California,markets that had participated in the overall weakness last week.

A recent capacity auction conducted by the Natural Gas PipelineCo. of America (NGPL) was “unreasonable and unduly preferential,”FERC said last week, but it refused to overturn the auction’sresults, as was requested by producers and marketers. It gave thepipeline the benefit of the doubt on the latter point, saying thatNGPL had “followed an arguable interpretation of its tariff,” whichhad been approved by the Commission.

Colder weather in northern market areas didn’t do much to raisecash prices, but it kept demand high enough to provide some pricesupport. Most eastern points were flat to slightly higher. In theWest, Rockies pipes emulated markets to the East with generallyflat performances, but California points fell by about a nickel ormore after PG&E announced it was lifting its two-daylow-linepack OFO.

“The Three Stooges didn’t fall as fast or as hard,” one traderremarked, as the usual weekend demand crunch, a bearish 6- to10-day forecast and Thursday’s futures market plunge were cited asreasons for the nearly universal drops of over a nickel. New YorkCitygate prices were among the hardest hit Friday, as Monday’shighpoint of $2.75 has given way to the mid $2.40s at the week’sclose.

“Following the screen” obviously didn’t apply Tuesday as thecash market’s mostly flat performance was a far cry from the8.1-cent drop in the Henry Hub futures contract for June. But, as aGulf Coast trader noted, a substantial portion of the screensoftness occurred after cash had finished trading for the day, andto him that means it’s a safe bet to expect a decline in cashprices today.

It didn’t take long for those predicting that May swing priceswould remain under index levels all month to have to eat theirwords. Not all points matched indexes again Tuesday, but quite afew did in a general show of strength by the cash market, and therest were coming close. Most gains were in the vicinity of a dime,but those in the Rockies and California markets tended to be closerto a nickel or so.