Holiday weekend prices fell as expected throughout most of thecash market Wednesday, but it was hardly the meltdown that sometraders had thought possible late in the previous week. Except forthe Southwest basins and California, few points fell by any morethan a dime, and most of the Gulf Coast, Midcontinent and Rockiesdeclines were about a nickel or less.

A cold front that had been moving eastward from the Rockiessince early Monday, leaving freezing or near-freezing temperaturesin its wake, was considered responsible for the weekend softnessbeing moderate. It was the approach of that front that arrested theslide of Northeast citygates earlier in the week, keeping them flatWednesday.

A marketer scolded himself for selling early intoColumbia-Appalachia at $1.99 because he was hearing pricesaveraging a dime higher later and as high as $2.19 on an electronicservice. He thinks a lot of TCO buyers went short early inanticipation of falling prices and got caught flat-footed.

A large aggregator noted that the Rockies, Permian and San JuanBasins and Waha were trading within a nickel of each other in the$1.90 area. Unlike the previous few days, he added, there was nolate squeeze on San Juan supplies because California loads weredropping off. Although neither of California’s biggest LDCsdeclared OFOs, the PG&E citygate and Southern California borderwere the day’s top loss leaders with drops of nearly 20 cents.

The sense of colder weather coming, along with a futuresdecline, had Northeast/Appalachia basis for December strengtheningWednesday, one source said. Transco Zone 6-NYC basis was back up toplus 54, after having dropped about a dime to plus 46-47 early inthe week. He also reported Zone 6 (non-NYC) at plus 35-37, TexasEastern M-3 at plus 32-33 and TCO at plus 10.5.

A couple of sources quoted Sumas for December in the mid toupper $2.20s. That would place it higher than Michigan citygates,which a marketer said were trading in the low $2.20s based onphysical basis of plus 7.5-9 for MichCon and plus 6.5-9 forConsumers Power. November indexes of $3.23-24 for Michigan werejust over 30 cents above Sumas. The first two sources called theSumas strength mystifying; “there’s no obvious reason for it,” onesaid.

Bidweek numbers generally were flat to slightly higher fromTuesday in Wednesday’s holiday-constrained market. A Texas traderestimated that about 80% of December baseload business had beencompleted prior to the holiday, so activity today and Tuesday willbe dominated by swing deals, he said. He said he and others he knewof had been planning to pull storage gas to cover Decemberobligations, but now expected to put that off until February.February futures were more than 20 cents above the December screensettlement at $2.120, he said, offering an attractive hedge.

One Gulf Coast marketer thought bidweek activity was “strange”Wednesday because he saw almost no fixed-price deals being done,only ones at index. A possible explanation, he said, is that manytraders did business at or near the $2.25 level Tuesday in the fearthat the market would be illiquid in Wednesday’s abbreviatedpre-holiday trading. However, the marketer noted, many points arenow trading at index-flat after having been done at index-minusearlier. “It seems as if the bottom feeders started to show theirhands,” he said of Wednesday’s thrifty buyers. He looks for thereto be more buyers than sellers “at least initially” today andTuesday. “Based on the prices they have seen over the past coupleof months and the lingering [cold] temperature hope for December,$2.12 cash doesn’t look so bad.

Another source expects a lot of volatility today. “Traders willhave had four or five days to reconsider their positions,” he said,”and when they get to the office they will act definitively.”

Although some were seeing index-flat deals getting done in theGulf Coast, a marketer said Chicago and Michigan citygates werestill around index minus 2 and index minus 3 respectively. He gavethese reasons for the popularity of index trading: for four[holiday weekend] days you can’t hedge prices, and who knows whatthe weather is going to do in that time; and with the AGA storagereport coming out Wednesday afternoon after most traders had madeearly holiday exits from the office, “there’s a pretty decentamount of uncertainty out there.”

Weather still looks pretty bearish for the Midwest early thisweek, one source said. “I’m getting kind of nervous, becauseusually we’re skiing here [Upper Midwest] by Thanksgiving, butthere hasn’t been enough snow yet for any area resorts to open. Thesame thing happened last year.”

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