Seen

The general market continued its downslide Wednesday, and traders saw very little chance of a near-term rebound, citing further screen softness, a storage injection report that significantly exceeded all prior expectations, and expectations that the out-of-season blasts of winter hitting much of the U.S. this week are about to go away.

Triple-digit spikes at the Southern California border andPG&E citygate were the standout leaders of a strongly risingoverall swing market Wednesday. Virtually all non-California pointswere up between about a nickel and a quarter, with the smallestincreases tending to cluster in the Rockies.

The April gas futures contract managed a minor gain Friday of8.4 cents to end the regular trading session at $5.270/MMBtu andclose a relatively quiet week on a somewhat sleepy note. For thetime being, the April contract appears essentially dormant within atrading range between $5.06, which was the low trade for April setlast Tuesday, and Wednesday’s high of $5.385, which was the initialreaction high after the AGA storage data was released.

Although the cash market’s downslide looked like it wasflattening out Wednesday in most instances except for California,sources tended to regard it as merely a resting place before moresoftness sets in. A majority of points ranged from moderatelysofter to a few cents higher, with the largest gains being realizedin the chilling Northeast. The Southern California border plungedand the PG&E citygate fell by about 40 cents.

As anticipated after Wednesday’s dollar-plus screen plunge, cashprices also were falling bigtime Thursday. Exceptions to declinesof 50 cents or more were rare. However, some sources detected signsthat the huge erosion of cash numbers that started late last weekmight be near an end.

If the Wyoming Department of Environmental Quality slows downthe permit approval process for companies eager to begin coal bedmethane projects in the state, the largest producers already thereare expected to have no trouble meeting their drilling schedulesthrough at least the first quarter of 2001. Anticipating thehearings, many had already moved proposed drilling projects for2001 through the regulatory process.

If the Wyoming Department of Environmental Quality slows downthe permit approval process for companies eager to begin coal bedmethane projects in the state, the largest producers already thereare expected to have no trouble meeting their drilling schedulesthrough at least the first quarter of 2001. Anticipating thehearings, many had already moved proposed drilling projects for2001 through the regulatory process.

Any attempt by Congress to re-regulate natural gas prices to putan end to the escalation in wholesale prices seen this year wouldbe a “mistake,” said FERC Chairman James Hoecker, even though hebelieves $4 gas is too high.

The meltdown occurred as expected Thursday in the cash market.Few points escaped with declines of less than 20 cents, with thegreatest losses of around 40 cents at the linepack-saturatedNorthern California points of Malin and the PG&E citygate,where the utility declared a systemwide OFO for today (seeTransportation Notes).