Gulf Prices Sag After Screen Retreats From Peak
May prices remained firm in morning business Thursday but were
getting softer in the afternoon after the June futures screen
started retreating from a dalliance around the $2.40 level, a Gulf
Coast producer reported. However, a marketer saw little movement
either way for May numbers in western markets. And another trader
said intra-Alberta prices "are getting wild," reporting them
straddling the C$2.80 level Thursday.
Barring any radical late changes, it appears that May indexes
will be up 30-40 cents or more from April's. One source cited two
major factors in the gas market's current bullish tone: (1) The
year-on-year storage surplus, which had seemed so overwhelming as
little as a month or two ago, has been declining rapidly at the
same time that deliverability constraints resulting from 1998's
drilling cutbacks have been showing up for many traders. (2) Crude
oil prices remained above $18/bbl last week and show little sign of
collapsing back to the sub-$11 levels that existed earlier this
A buyer who paid in the mid $1.90s for gas into CIG-North System
said supplies seemed fairly tight. "I had a couple of other deals
snapped up by someone else before I could pull the trigger," he
said, expressing amazement at Rockies prices for May climbing more
than 40 cents above April indexes.
A Rockies trader sees little risk in going into May on the short
side. The Pacific Northwest is due to warm up around May 5, he
said, and when that happens mountain snow will start to melt and
give a boost to hydropower production. He looks for western prices
to fall as hydropower displaces a large amount of electric
generation load for gas.
May should be an interesting month for Southwest markets due to
the unusually high level of scheduled maintenance, a marketer said.
Conoco's Blanco (NM) processing plant will be down 100% May 11-13
and at a fraction of normal capacity for some days after that, he
said. Williams will be performing some plant maintenance in the
same area, the marketer added, and El Paso has a heavy schedule of
Last-gasp April trading saw numerals in the price change column
that closely resembled those of the day before, but this time they
had plus signs in front instead of minus signs. Most points were
flat to 3-4 cents higher. Northern Natural Gas was the only pipe
recording nickel-plus gains at all three major trading
points-field, demarcation point and Ventura. Everybody wanted to
get daily swing deals done quickly in order to finish May business,
an aggregator said.
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