Storage Report May Depress Aftermarket
The April aftermarket was off to a very strong beginning in
swing deals done Wednesday. Virtually every point was trading above
bidweek levels and in some cases much higher. For example, a buyer
who paid in the mid $1.70s for April baseload at the Southern
California border reported a $1.90-95 swing range. Most sources
agreed that the incremental price strength derived almost entirely
from "following the screen" upward.
But as a producer observed, "Everything looked like it was going
through the roof until the AGA report came out." He was fairly
certain that the anemic figure of 37 Bcf in withdrawals last week
would soon deflate April's early price run-ups.
Indeed, even before the report was issued, there were
indications the cash market's bullishness was starting to run out
of steam. Incremental numbers followed futures higher for much of
the morning, one trader said, "but by about 11 p.m. CST prices just
tanked." Chicago citygates that had been in the $2 area earlier
fell to about $1.90, he said. And a Midcontinent producer said
Panhandle Eastern backed off to $1.80 after running up to $1.87.
A marketer believed some of the late softening resulted when
buyers had covered their positions. "After that there were just no
buyers to be found," he said.
Although most deals appeared to be for the 1st only, some people
were also trading for the April 1-5 period because they have the
Good Friday holiday off, a marketer said. The five-day prices
tended to be a little lower because of some doubt about how weekend
conditions would develop, he added.
A source who had traded Sumas mostly in the low $1.50s during
bidweek reported swing deals that ran up from $1.56 to a peak of
$1.70. A bit of colder weather in the Pacific Northwest and the
start of storage injections served to tighten supplies at Sumas, he
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