As sources had predicted (see Daily GPI, July 14), the weekendmarket was divided along geographical lines. Eastern quotes were upby around a nickel to a little more than a dime in most cases,while the majority of western points registered declines rangingfrom slightly less than a dime to 20 cents or more.

Futures eventually ended the day with a small loss, but was inmodestly positive territory while cash was trading. That, plus adime-plus gain the dime before, was enough to boost cash prices inthe East despite relatively moderate weather in the Northeast andMidwest.

But except for intra-Alberta, a screen-tracking market that sawone of the West’s rare advances, most western points showed weekendweakness. Severe heat in many of the region’s non-coastal stateswasn’t enough to support prices, a producer said. Instead, thepossibility of OFOs by California’s two big LDCs persuaded manytraders to “dump” their gas as soon as they could, he said. Andalthough no OFOs were in effect for Saturday, traders still had tobe wary of ones that might be issued for Sunday and/or Monday, headded.

Northwest prices saw a flip-flop in price positions betweendomestic and Sumas gas. Domestic numbers suffered a much largerdrop, placing it several centsbelow Sumas. A U.S. source whotrades both Kern River and Northwest at Opal said some of thesoftness likely was related to the impending return today of abouttwo-thirds of Westcoast’s Fort Nelson Plant processing capacity.However, he attributed more of it to Northwest’s continuedcomplaints about high linepack at its south end and to the generaldrop in weekend demand.

A Gulf Coast trader called Friday “just another day in the gaschamber.” Mild Northeast weather was an area that was suspect inthe eastern upticks, he said, but rising prices “tell me utilitiesare still using periods of price moderation [such as Thursday’s] toincrease storage purchases. They’re saying, ‘You give us theopportunity [with lower prices] and we’re going to put gas back inthe ground, and put it in big.'” He had been expecting supplyturnbacks in Louisiana on Transco and Tennessee, but said nothingserious of that sort happened.

The trader went on to say a lack of sustained heat nationwide,no hurricanes and the storage issues starting to become manageable”have put this whole value chain in question. This move up above $4was based on certain understandings back early in the year ofdeclining deliverability.” Those understandings may have seemedvalid at the time, he said, “but we never should have had a 97 Bcfinjection if deliverability was really in question.”

Waha and Katy, which had been trading at parity earlier in theweek, began to see some spread again as a bigger gain at Katy putit about a nickel above Waha. Oasis was discounting weekendtransportation enough that if you put together the rightcombination of lower-priced Waha deals with higher-priced ones atKaty, it was feasible once more to ship gas eastward across Texasto Katy, said a marketer who was doing just that with a couple ofpackages.

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