Price Declines Accelerate in Weekend Business
After a brief fling with index levels or higher at midweek, it
was back to sub-index territory Friday as the cash market, again
cued by the futures screen in the absence of fundamentals, saw
general drops between a nickel and more than 15 cents. Most
declines were on either side of a dime. Despite the sizeable
weekend pricing losses, nearly all points finished the week about
even with the previous Friday's numbers or slightly higher.
Just about all Texas markets have gone back to about a dime
under index, according to a Houston-based source. He said he spent
much of last week "tweaking" industrial markets for both overpulls
and underpulls. He reported getting fewer and fewer gas orders from
the state's electric utilities as the week went on. And unlike last
month, "I don't have any storage plays going on now," the source
San Juan Basin quotes, which had ridden high for much of the
week based on processing plant and other outages, suffered Friday's
biggest loss of 15 cents after most if not all of the constraints
had ended. It also had by far the largest price range of about a
quarter. Although the Blanco pool traded for most of the morning in
the mid $1.80s, a marketer said, there was a late rebound to the
mid to high $1.90s. He thought some traders had sold early without
having the gas in their possession yet, expecting a continued
free-fall in pricing. "Then they had to cover their shorts [short
supply positions] and couldn't go to the Permian [Basin]" where
prices were considerably higher around $2.06-07.
A NOVA imbalance tolerance change prompted by high linepack put
downward pressure on intra-Alberta prices, according to a marketer
whose high C$2.50s quotes fell by just over C10 cents.
Other than the big price downticks, the weekend market was
pretty featureless, a Northeast trader said. Barring any unexpected
market influences, he looks for low volatility to dominate through
the middle of this week as much of the trading community attends
the GasMart/Power '99 trade fair in Dallas.
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