Drops

The somewhat surprising recent firmness of swing prices held uponce again in most cases Friday, refusing to yield to either thenormal drop in weekend demand or a continuing dearth of fundamentalweather support.

That softening that everybody was expecting in vain since thestart of last week finally showed up to start off this week. Mostdeclines were in the neighborhood of a dime but generally were lessthan that in the West, especially California, and much greater thanthat at Northeast citygates.

NiSource dropped its hostile $74/share tender offer ($6.1billion) for all of the outstanding common stock of Columbia EnergyGroup (CG) last week and said it will return the 47,576,897 CGshares, representing 58.6% of the Columbia shares outstanding, toshareholders. It doesn’t mean, however, that NiSource is giving up.On the contrary, the company said it intends to continue thenegotiation and bidding process set up by Columbia’s board.

The Northeast differentiated itself from the rest of the marketyet again yesterday. Contrary to Friday’s results when manyNortheast points gained more than 20 cents, however, theNortheast’s attention-grabbing price activity yesterday felldecidedly on the bearish side as Transco Zone 6-NY fell $1 andTetco M3’s average dropped from the high $3.20’s to $3.

NiSource dropped its hostile $74/share tender offer ($6.1billion) for all of the outstanding common stock of Columbia EnergyGroup (CG) yesterday and said it will return the 47,576,897 CGshares, representing 58.6% of the Columbia shares outstanding, toshareholders. This does not mean it’s giving up, however. On thecontrary, NiSource said it intends to continue the negotiation andbidding process set up by Columbia’s board.

For a lower-demand weekend period preceded by a falling screenand expected to continue the unseasonably warm weather pattern thatdominated nearly all of November, there was surprising firmness inmost of the cash market Friday. Except for further Northeastcitygate declines, essentially flat quotes prevailed elsewhere. Onetrader suggested the moderate gain in futures Thursday may haveprovided a modicum of psychological support for cash traders Fridaymorning.

The usual softness that accompanies a lower-demand weekendperiod arrived on schedule Friday. Price movement ranged from flatat some Rockies points to down as much as a dime in the Gulf Coast.Once more, mild weather along the East Coast caused Northeastcitygates to register the biggest declines of 15 cents or more,with Transco’s Zone 6-NYC pool again topping the list with a fallof about 30 cents. The Zone 6 slide into the mid $2.30s left ittrading little more than 20 cents above the production area’sTransco Station 65.

For the second Friday in a row, most points avoided the pricejinx associated with lower weekend demand. Flat to slightly higherwas the general rule, although a few points rose by as much as 8cents. Most of the weaker spots were concentrated in Northeastcitygates and the Rockies, with Iroquois Zone 2 deliveries fallingby almost 15 cents. Prices were down overall, but experiencing alate bounce due to screen strength, a Northeast trader said.

“Other than a 15-cent crash, it’s a fairly quiet market.” That’sthe only comment a Sumas trader had to offer Tuesday other than acouple of price quotes. It appeared the cash market may have onlybeen teasing producers with Monday’s moderate firming afterdouble-digit decreases dominated on Tuesday. Some sources pointedat futures as a source of cash weakness, but most said it was morethe continuing lack of positive fundamental influences that causedmost points to approximately double the screen’s fall of just over9 cents.