Eastern Points Follow Screen Lower; Warm West Flat
The cash market finally broke free from the doldrums that had
becalmed much of it earlier this week and found a direction in
which to move Thursday-mostly down a few cents in the East. Sources
cited the decline in the Henry Hub futures contract for July as the
main reason for eastern cash drops that ranged up to a nickel or
so. However, continued warm to hot weather kept air conditioners
humming in the West, and the resultant power generation load for
gas rendered most of the region's trading points resistant to the
general softness. Western quotes tended to be flat to up a penny.
Wednesday afternoon's AGA storage report seemed kind of bullish
since the figure of 63 Bcf in injections fell well short of most
expectations, a Gulf Coast producer said, but cash apparently was
not reacting that way Thursday.
Power prices were rising in the West and that helped support gas
prices, according to an Oklahoma source. San Juan Basin numbers
took a little dip in the middle of trading and then came back up
near the end, he said, while Southern California border quotes
remained strong all the way.
Intra-Alberta pricing fell slightly to C$2.79-80 despite a NOVA
pigging operation that is keeping more than 800 MMcf/d off the
market through next Wednesday, a Calgary marketer said. He figured
prices would be down to the low to mid C$2.70s if it hadn't been
for the supply cut. But intra-Alberta numbers are stuck in a rut
right now with little in the way of weather to influence them
either up or down, he said. The Alberta market was quieter than
usual due to a NOVA golf tournament, he added.
A Midcontinent trader considered himself lucky after selling
into NGPL-TexOk at $2.21 and ANR-Southwest at $2.16 early when
prices were relatively flat. "When they dropped later, we were able
to backfill," he said. He expects most Midcontinent pipes to fall
into the mid $2.00s today due to mild weather and the usual weekend
demand slump. But prices should be recovering around next Wednesday
when temperatures are forecast to be in the 90s, he said.
The same Midcontinent trader said the storage report had little
effect on the market "because I think we're on a pace where the
storage situation justifies the prices. We're right where we should
be [on storage injections]."
July physical basis quotes narrowed Thursday in sympathy with
the screen's softness, a Texas marketer said. She reported basis
talk of minus 6-6.5 for both ANR-Southeast and Texas Eastern's East
Louisiana zone. Basis is minus 9.5-10 for Texas Eastern's South
Texas zone, she said.
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