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Softer Market Sees Biggest Drops in Rockies, NNG Points

Softer Market Sees Biggest Drops in Rockies, NNG Points

Much of Monday's swing market closely resembled that of Friday: flat to down 3-4 cents. But some points were conspicuous with substantially larger decreases. Since CIG and Public Service of Colorado ended price-boosting OFOs over the weekend, prices on CIG-North System and Questar fell by a little over a nickel. The steepest plunge by far of almost 20 cents came at CIG-DJ (Denver-Julesburg) Basin, which had soared by a similar amount last Wednesday after PSCo declared a Restricted Delivery Day situation.

Except for NorAm flatness, Midcontinent field numbers tended to be among the day's softer ones. But the region's price weakness was most acute in Northern Natural's three main points (field, demarcation point and Ventura), which dropped between a nickel and a dime as the pipe's primary market area of the Upper Midwest was warming up.

Cash got a moderate late boost from the futures trading pit. The screen was down slightly during most of swing cash business, an Oklahoma source said, "then started heading up 7 cents just as we were starting to wrap things up." The futures surge came in time to bring last-minute cash quotes up a few cents. Another trader said Nymex's late-afternoon Access trading session was "down for some reason" about 4 p.m. CDT. "That throws some cash traders into a tizzy because they don't have that crutch [Access] to lean on."

The swing activity levels by some sources were noticeably lower Monday as the main part of bidweek got under way, although they had little to report beyond basis talk and trading. A marketer, who was hearing Transco Zone 6-NYC at plus 26.5 and TCO at plus 16.25, said TCO was being bid on a fixed-price basis at $2.45 and offered at $2.52. Based on Monday afternoon's futures run-up, she thinks sellers currently have the upper hand and most of the converging will be done by bidders.

A Midcontinent trader placed Chicago basis at plus 4-4.5 and said MichCon was being bid at plus 11 and offered at plus 12. The trend appears to be slightly bullish, he said, based on seeing a Chicago citygate for May go for $2.35 on an electronic trading service after a $2.33 deal had been done earlier. Other early-bidweed basis talk included Transco Station 65 at plus 1.5-2, TGT Zone SL at minus 1-1.5, and Southern California border at minus 6-7. Other traders were hearing fixed numbers of $2.03-05 for San Juan-Blanco and $1.95 for Sumas.

One source suggested that Houston traders may be in more of a hurry than usual to close out bidweek deals because "the Shell Houston Open [golf tournament] will be getting down to some serious competition Thursday and Friday."

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