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Midcontinent/Midwest Softest in Mostly Flat Market

Midcontinent/Midwest Softest in Mostly Flat Market

The cash market entered one of its leveling-off phases Thursday with flat prices prevailing at a majority of points. A little early strength on the futures screen helped buoy physical gas at first, but toward the end of the morning cash numbers were following the screen lower "step for step," a Gulf Coast producer said. Once again there was essentially nothing to influence trading beside the screen, she added, dismissing the AGA storage report Wednesday afternoon as a non-event.

Most of the softness was concentrated in the Midcontinent/Midwest region, which was losing any vestiges of heating load that might have been lingering before Thursday. Northern Natural Gas points fell almost a nickel.

A marketer quoting only one fixed price for the day thought his $2.255 purchase into Trunkline-East Louisiana was a little on the expensive side because of a capacity curtailment. The pipeline took its offshore T25 platform out of service Thursday for an undetermined period of maintenance on the fuel system piping. However, Trunkline said, although offshore producers may experience daily pressure fluctuations during the work, it did not qualify as a force majeure for daily scheduling penalties.

One of the day's widest ranges came at Northwest-Sumas, where late trades plunged from earlier levels. A marketer who started the day with a $2.10 Sumas deal saw his last purchase slide to $1.94, saying demand diminished quickly due to warming weather in the Pacific Northwest. It's obvious that late mountain snowmelt is still delaying the onset of what is expected to be copious hydropower, he said; many of the buyers at Sumas Thursday were power generators. But the marketer doesn't expect a steep plunge in gas prices when the hydro finally arrives. There is still plenty of room for putting gas into storage because injections in the Northwest have been delayed this spring, he said.

A couple of sources reporting another "quiet" day of trading activity were hopeful that the market will liven up a bit as bidweek gets nearer. A marketer reporting June basis of plus 5-5.25 for Chicago citygates and minus 4 for NGPL-Louisiana said he was seeing "normal spreads so far."

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