As expected, weekend prices took a steep plunge in Friday’strading as almost every point fell by around 20 cents or more. Thebiggest drops of almost 40 cents occurred at the SouthernCalifornia border and PG&E citygate, where both majordistributors had widely anticipated high-inventory OFOs in placefor Saturday.

Futures gains by both natural gas and crude oil had littleimpact on the cash market’s heavily bearish outlook; instead, itwas the continued dearth of significantly cold weather along with arash of high-linepack pipeline OFOs that pushed prices much lower.

Earlier in the week only the Rockies had been registering somesub-$2 quotes. But on Friday all Rockies pipes were solidly under$2, and they were joined by the Southwest basins and many GulfCoast and Midcontinent points with quotes displaying a “1” in thedollar-digit place. Prior to last week, Daily GPI had not receivedprice reports under $2 since July 23, a Friday on which San JuanBasin (non-Bondad) prices for July 24-26 flow were as low as $1.86.A marketer said he remembered that time well because July had beenrife with OFOs at several western points.

There was a un-linking of futures and cash Friday following aperiod of cash weakness tending to drag the screen lower, a GulfCoast marketer said, noting that futures had gained more than adime in the midst of the cash crash. “We’ve had a fairly large[25-30 cents] discount of cash from the screen over the last week,but the gap grew to more than 50 cents [Friday],” he said.

Minimal impact to the U.S. was expected from a broadlow-pressure area in the northwest Caribbean Sea that showed littlesign of intensifying Friday.

©Copyright 1999 Intelligence Press Inc. All rights reserved. Thepreceding news report may not be republished or redistributed, inwhole or in part, in any form, without prior written consent ofIntelligence Press, Inc.