Prices Down for Weekend; Rebound Seen This Week
The weekend cash market followed the script written for it by
falling between between a nickel and just over a dime at nearly all
points Friday. It was a "typical" low-demand period phenomena,
according to one marketer; another, phrasing it slightly
differently, called it "just the usual weekend blowout."
But though the general softening was hardly a shocker to anyone,
some were surprised at the ability of a few points to reverse field
in late activity. The only thing that gave any support to Gulf
Coast and Northeast prices was Henry Hub cash trading higher near
the end, one source said. The highly volatile San Juan-Blanco pool
(range of 20 cents) was another rebound example.
A trader who saw Columbia-Appalachia start moving up from the
$2.30s into the $2.40s after 10:30 a.m. thought it was due to "more
room in storage than people thought" and the rumored contemplation
of OFOs by utilities Delmarva Power & Light, Baltimore Gas
& Electric and Cincinnati Gas & Electric. However, no OFOs
actually materialized, he said.
Forecasts of hotter weather, mostly in the eastern three-fourths
of the U.S., have most traders expecting a moderate to strong price
upswing this week. The dwindling storage surplus and a 4-cent
screen gain Friday-which went against the grain of the cash
weakness-enhanced the predictions of higher prices. Also, another
reason for bullishness is that July crude oil futures climbed back
above $17/bbl Friday, one source noted.
"A lot of people thought prices would be off more than they were
today [Friday], especially in the West," said the head of western
trading for a major aggregator. He thought the market showed quite
a bit of resiliency, "especially in light of no UEG [utility
electric generation] load in California." It was quite a wild ride
in San Juan Basin, the trader said, where Blanco numbers got down
to the mid $1.80s at one point but were back above $2 near the end
of trading. People don't seem to be keeping pace with storage
injections in western markets, he said. Thus with currently cool
weather in the region dampening gas prices, he expects a strong
rebound "when it warms up." Intra-Alberta defied the overall weaker
market with a small increase Friday, which a marketer attributed to
trading that goes on all day; "thus it [intra-Alberta] had a longer
time to be influenced by the screen's rise."
A Texas buyer had intended to stay out of the market, but said
it was just too tempting to pass up when Houston Ship Channel, Katy
and Carthage numbers fell almost a dime into the mid to high
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