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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