The cash market continued to muddle around Monday in a generallyflat mode with a slight bias to the upside as traders tried toassess whether there was enough cold weather around to reallymatter. To Houston sources donning sweaters for possibly the firsttime this season, the answer might have seemed to be yes, but toothers it was no as they noted the abundance of available storageand the fact that only a few markets were experiencing sub-freezingtemperatures. Most points were flat to a couple of cents higher,with the declines of any size occurring at Northeast citygates(although Transco Zone 6-non NYC bucked the trend there with asmall gain). Northeast weather was rainy but not freezing.

The increases of more than a couple of cents were concentratedin the Rockies, Southwest basins and California. Although nonecould be confirmed directly, there were reports of some productionwells freezing off in San Juan Basin. Although ambient temperaturesin the region were mostly above freezing during the day, it’spossible for San Juan’s low-volume wells to freeze under thoseconditions, sources said. One trader explained that the pressuredifferentials on either side of the measurement meter’s orifice canlower temperatures several degrees further than normal and causecondensate to freeze in the wellhead.

TGT had an engine go down a short ways downstream of theCarthage Hub for about eight hours Monday, backing up gas in Zone 1and causing gas shoppers there to turn to Zone SL supplies instead.The incident helped support Henry Hub prices a bit, a marketersaid. However, the engine was on-line again by late Mondayafternoon, TGT gas control said, and little overall market impactwas seen.

Despite the possible San Juan cutbacks, the West’s pricestrength surprised a marketer because of how low the futures screenwas trading below Friday morning’s levels.

Even under recent bearish conditions, “the one thing we haven’tdone yet is trade below index” at most Gulf Coast points, said aHouston-based trader. However, he expects that to happen later thisweek due to mild weather forecasts. “The dynamics of supply anddemand say we should see sub-index quotes pretty soon,” he said.

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