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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