Cash Market Flattens Out Going into Weekend
It was like old times again (if you can regard February as "old
times") for traders Friday as weekend swing pricing leveled off
with little change from Thursday. It reminded some of the long
periods last month when there was practically no volatility in the
cash market. The small gains handily outweighed a few scattered
penny drops in the West for an overall showing of flat to a smidgen
A gap of nearly C20 cents has opened between Westcoast Station 2
and intra-Alberta, which usually track each other much more
closely, one source said. Station 2 was in the high C$1.90s while
intra-Alberta traded in the mid C$2.10s, she said. A constraint is
in place at Gordondale, the provincial border point where the NOVA
and Westcoast systems connect, and whatever British Columbia gas
can get through is flowing into Alberta because of the stronger
market there, she added.
Predictably, late-March activity was dropping off as people
turned more of their attention to the April bidweek. April trading
picked up some Friday but was still rather slow, a marketer said.
A Texas producer noted, "We're selling Agua Dulce gas at Ship
[Houston Ship Channel index] minus 5." His company is starting to
see the effects of slowed-down drilling in 1998, he said, because
current production levels are down considerably. He thought that
was also true of many other producers. It was encouraging that
crude oil futures closed above $16/bbl Friday for the May, June and
July contracts, the producer said; "that helps make us more bullish
A marketer found very tight March-April convergence in the San
Juan Basin. He was buying Blanco pool gas for April at $1.57-59,
which dovetailed nicely with his March swing deals at $1.57-58.
One source reported Michigan citygate basis at plus 8.5, saying
it had gotten stronger since earlier in the week. Michigan
temperatures were around 50 degrees Friday, "which is a veritable
heat wave for that state in March," he said.
A marketer hearing $1.52-53 numbers for Sumas in April said
summer term (April-October) deals were a bit higher at $1.54-57.
The intra-Alberta differential was even bigger, she said, quoting
April-only at C$2.23-24 and summer at C$2.33-35.
"I don't care whether the direction is up or down, I just want
to see a sizeable change Monday in the April futures contract prior
to expiration," a Northeast-oriented marketer said. "We need more
volatility, but I'm afraid it probably won't happen."
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