Some Points Exceed Index Levels by a Dime
The cash market continued Tuesday to show the same signs of
aftermarket strength-and even more in some cases-that it did last
Friday in swing deals done for June 1 only. Many of the Gulf Coast
pipes were trading about a dime above indexes, and most other
points were at least a nickel above indexes. However, some traders
didn't expect the higher prices to last, noting late softness in
some markets such as Chicago.
More than one source expressed amazement at Chicago citygates
trading even with or below Henry Hub (Chicago led by 6 cents in
June indexes). One said he averaged $2.33-34 at the citygate before
the numbers started "cratering" in late activity. With cash numbers
moving so low, "the strategy right now is to hide it [gas] if you
can," he added. A marketer who regretted going into the month long
in the Chicago market said he had some trouble getting rid of
supplies in late deals.
Air conditioning load has yet to have a big impact on the cash
market but it's getting close, said a Houston-based source noting
local forecasts for high temperatures in the 90s this week.
A western marketer was surprised at the market's relative
post-holiday strength. Pacific Gas & Electric's high-inventory
Stage 1 OFO, which was in effect Monday and Tuesday but not
extended to today, "did not have the price softening effect that I
thought it would," he said. But according to another trader, it's
only a matter of time before prices in the West get weaker and have
a dampening effect on the overall market. Long-delayed mountain
snowmelt is gaining momentum in the Pacific Northwest, he said, and
hydropower output increasingly will displace gas-fired electric
A Gulf Coast trader reported hearing guesses of 75-85 Bcf in
this afternoon's AGA storage injection report, compared to a
year-ago figure of 106 Bcf. If the report comes in below 75 Bcf,
"we're expecting July futures to jump to about $2.50."
©Copyright 1999 Intelligence Press Inc. All rights reserved. The
preceding news report may not be republished or redistributed, in
whole or in part, in any form, without prior written consent of
Intelligence Press, Inc.