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Market Stands Pat as Influences Remain Neutral

Market Stands Pat as Influences Remain Neutral

The overall market continued to consolidate mostly flat positions Tuesday in another session of quiet trading and fairly tight price ranges. The little bit of movement tended to be slightly to the downside. Once again traders gleaned little in the way of guidance from a stagnant futures screen or from mild weather fundamentals. A couple of sources seemed resigned to finishing out the rest of the week in a sideways market.

Mild weather remains very much a non-event for gas in the Northeast, according to a regional end-user. But as a dearth of power generation load continued, gas still has at least a 15-cent competitive margin below fuel oil at the burnertip, he said. He pegged current New York Harbor prices for No. 2 oil in the $2.60s per MMBtu but was paying in the mid $2.40s Tuesday for Transco Zone 6 gas deliveries.

The Florida market is staying pretty weak for now, said a Gulf Coast source. He reported a lot of people trying to buy Florida Gas Transmission-Zone 3 in the low $2.20s, "but I just couldn't reach that low." He did close one Zone 3 deal at $2.27. Utilities are trying to buy low in Zone 3, then sell gas in Zone 2 and pocket the basis differential premium for Zone 2, which has been running 2-3 cents above Zone 3 recently.

A marketer quoting a $2.25-28 range for Sonat expressed surprise at a long period of no operational flow orders from the pipeline. "We've only had one that I can remember since April," he said.

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