Northeast Prices Sink as Other Points Tread Water
While the American Gas Association (AGA) report loomed at the
end of Wednesday's trading, moderate temperature forecasts and the
easing of New England and New York electricity jams were enough to
cause drops of more than a nickel in the Northeast. The New York
citygate ended the day in the mid $2.50s after ascending to the mid
$2.70s on Monday.
Even before the AGA reported a 91 Bcf injection, one source was
unimpressed, saying the report's influence has already been felt.
"I think the whole storage movement has already happened. If it
falls anywhere near where people say it will fall, in the 75-85 Bcf
range, I think the report will have a minimum affect. The only way
it will have an impact is if it's over 100 Bcf. If that happens,
look for the screen to drop to the high $2.30s."
A Texas-based trader guessed the AGA would report an 80-85 Bcf
injection but was more concerned about the other factors that were
influencing spot prices in Texas. "We're not going anywhere right
now." With the moderating temperatures in the Northeast and no heat
to speak of in California, Texas gas "isn't moving like I want it
to," he said, quoting Houston Ship Channel prices in the mid $2.30s
for Wednesday, a couple of cents softer than Tuesday's results.
Favorable forward spreads are making California buyers feel very
short right now, a Houston-based marketer said. With June trading
at $2.30 at the California border and July at $2.40, it makes sense
to buy spot gas for storage and lock in a profit next month.
In Canada, one trader said a delay in snowmelt due to cool
weather is reducing the amount of hydropower in the Pacific
Northwest and British Columbia. That, coupled with frost warnings
in Calgary the past several nights, has kept Intra-Alberta gas
prices strong. However, when it does finally heat up, she said the
flood of hydro will displace gas burn for electric generation and
prices should come off.
Price strength at Northern Natural Dmarc surprised one Midwest
trader, who cited ONG prices in the mid $2.20s and Dmarc average in
the low $2.30s. "I would have thought electric generation within
Oklahoma would have put the intrastate pipes at a premium over
Dmarc, but so far that has not been the case." He said Midcontinent
prices rallied in the afternoon session yesterday.
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