San Juan Spike Stands Out in Mostly Lower Market
Most of the cash market continued to sink a few cents lower
Monday in price showings that ranged from essentially flat to down
more than a dime on ANR's Southeast Mainline, which is experiencing
a capacity curtailment of about 100 MMcf/d during May due to
But just as a transportation constraint caused ANR-Southeast
prices to fall 11 cents, a supply shortfall caused San Juan Basin
prices to soar higher by a like amount. A one-day annual
maintenance shutdown at Williams Field Services' Ignacio Plant,
which usually occurs during the first week of each May, is limiting
the plant to about 125 MMcf/d of production for today's gas day,
about 400 MMcf/d under its recent average, a WFS spokesman said.
However, those lost volumes will begin returning quickly at the
start of Wednesday's gas day, he added.
The supply squeeze took Blanco pool prices as high as $2.04
Monday, although a marketer reported that the last trade of the day
on an electronic service had retreated slightly to $2.00.
In addition to the San Juan strength, Western points in general
managed flat to slightly higher performances or fell no more than a
couple of cents. Chilly weather is still lingering in the region,
and the much heralded onslaught of hydropower production, which is
expected to take a large bite out of gas load for power generation,
was still in abeyance for the most part. It remains cold enough in
the Pacific Northwest that little mountain snowmelt has occurred,
so hydro hasn't come on strong yet, one source said. But when it
does, "watch out for falling [gas] prices."
A Texas producer, not liking the market outlook, didn't bother
to do any fixed-price deals. "What we need is some heat in Texas,"
he said, speculating that maybe heat will arrive after a broad area
of thunderstorms pulls out of the state. But another trader doesn't
expect any serious air conditioning load anytime soon, saying she
thinks it won't get "real warm" around Houston until the last half
It's kind of like "toss a coin and make your guess" about
whether cash will rebound today, a marketer said. However, there
are so many long positions in the Nymex futures trading pit that
she expects the screen to either keep cash gas from rising or even
drag it lower.
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