Some Gulf Coast quotes were topping the $3 level Thursday ascash prices resumed climbing after Wednesday’s leveling-off period.Increases ranged from about a nickel in California to more than 15cents at New England citygates and on CNG in Appalachia. A risingfutures screen provided moderate support for cash, but thespreading of colder weather was the chief cause of the price gains,sources said. However, numbers were retreating in several marketsin late deals. A Gulf Coast producer was able to get only $2.90 ina very late Henry Hub trade after the point had been trading in thehigh $2.90s for most of the morning.

Although a relatively warm West possibly could see lower pricesfor the weekend today, the current bull market is likely tocontinue in the East. An arctic cold front pushing southward andeastward from the Upper Plains is expected to bring freezingtemperatures to parts of the Deep South by Sunday, with morenortherly climes correspondingly colder than that.

Most of Thursday’s increases of less than a dime came at westernpoints. A California trader thought that market’s gains were duemore to the previous evening’s run-up in Access futures tradingafter the AGA’s relatively meager storage injection report than toany weather factors.

The spread between the Southern California border and Southwestbasins got even tighter than before because a good portion of SanJuan and Permian supplies was being sent to Waha and Midcontinentpoints, a big aggregator said. The price differential between thebasins and border did not cover the variable cost of transport, sheexplained, so it made more sense to move the gas eastward. Basinprices got a further boost from a low-linepack OFO on El Paso (seeTransportation Notes), which forced several east-of-Californiautilities into the market to make up negative imbalances, theaggregator said.

On the other hand, Texas utilities were buying almost no gas atall, said a Houston-based marketer. He got what he felt was astorage play sale at Houston Ship Channel; other than that, theonly other sale he could achieve was into Florida GasTransmission-Zone 1 (FGT also had a low-linepack OFO in effect forits market area Thursday). The marketer said it appears that mostpeople have just about topped off their storage in the productionarea. With the relative dearth of power generation load in Texas,Ship Channel prices have dropped back into a dead heat with HenryHub after trading at about a nickel premium to the Hub in recentweeks.

Prices were strong at the Chicago citygate. “There were severalparties out there that I know of who got backed into a corner andhad to buy some stuff at the higher numbers today [Thursday],” hewent on. Chicago started at 13 cents above the screen and wound upas much as 19 cents higher, a marketer said. “That is very strongwhen you figure that November Chicago basis is only around plus 17.We have convergence, and it’s not even bidweek yet.”

Little is happening yet for next week’s November bidweek.However, a marketer said he had gotten a South Texas offer at theHouston Ship Channel index minus 5, but he considered that somewhatinsulting because he expects South Texas to trade at HSC indexminus 7.

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