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Nuke Outages, Hot and Cold Weather Boost Prices

Nuke Outages, Hot and Cold Weather Boost Prices

All-around price increases Wednesday received support from contrasting weather conditions and rising power generation load (plus a tiny assist from a barely higher screen). Most upticks were in the neighborhood of 4-8 cents, although smaller ones were as little as two cents at the PG&E citygate.

Electric utilities continued to increase gas purchases in several regions as nuclear plant outages either continued or began. Major nukes remain down in Texas, Arizona and California, sources said. A Commonwealth Edison nuclear plant reportedly went off-line unexpectedly, helping to propel Chicago citygate numbers upward by just over a nickel. In addition, a Midcontinent trader said he was hearing several coal plants were down for maintenance.

The gas market was in "double jeopardy" between hot weather in the South (high temperatures in the 80s) and unabated cool weather in the West, a Houston marketer said. That had gas coming and going both ways, he said, adding, "We're kind of long on gas right now, so it's quite all right with us."

Though it was canceled Wednesday, a temporary electric capacity alert Tuesday in peninsular Florida by utility giant Florida Power & Light kept prices into Florida Gas Transmission-Zone 2 at the top of the Gulf Coast ranks for a second day in a row. An LDC buyer confirmed that demand remained very strong in Florida Wednesday, "and it's definitely all power generation-related." Florida citygate index spreads doubled, he said, from index plus 11 Tuesday to index plus 22-25 as buyers anted up for whatever delivered supplies they could find.

When Gulf Coast prices shot up nearly a dime in early trading, a producer was surprised to see them settle down in much tighter ranges than he expected after the initial high volatility.

As they have been for many weeks now, AGA's report Wednesday afternoon of a minuscule 2 Bcf in injections was considered already factored into market strategy and was expected to have little if any price impact.

A marketer said she was able to do a National Fuel Gas sale Tuesday at $2.20, a premium of 3-5 cents over her Transco Zone 6 (non-NYC) and Texas Eastern M-3 quotes that day, because the NFG deal was a week's term. Daily NFG swing usually trades at a small discount to M-3 and Zone 6, she said.

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